The Czech economy has maintained its momentum in the second quarter of 2025, growing by 2.4 percent year-on-year – matching the pace of the first quarter. However, quarter-on-quarter growth slowed to just 0.2 percent, according to the Czech Statistical Office. This deceleration has raised concerns among analysts, who view the results as somewhat disappointing amid growing uncertainty fueled by tariffs imposed by US President Donald Trump.
Domestic demand has been the primary driver of economic growth, particularly household consumption and capital formation, as noted by Vladimír Kermiet from the statistical office. While most sectors of the national economy performed well – with industry, trade, transportation, accommodation, and food services contributing significantly to the annual growth – manufacturing experienced a slight decline.
Economic experts are divided in their assessment of the situation. PwC analyst Dominik Kohut maintains an optimistic view, pointing out that the Czech economy continues to outperform the European average, with household consumption serving as the main growth engine for more than a year. However, the majority of economists express concern about the dramatic slowdown in quarter-on-quarter growth from 0.7 percent to 0.2 percent.
The previous quarter had benefited from European manufacturers frontloading exports to the American market before Trump’s tariff barriers took effect. This temporary boost to foreign trade balance has largely dissipated, causing international trade to become a drag on the economy in the second quarter. With US import tariffs now stabilized at 15 percent, growth is expected to further decelerate in the second half of the year.
Looking ahead, Pavel Sobíšek from UniCredit Bank predicts that the Czech economy will face a tug-of-war between persistent private consumption and weakening exports due to US tariff policies. The latter will inevitably cause growth fluctuations and overall reduction compared to a scenario without tariffs. Despite these challenges, Miroslav Novák from Citfin forecasts the overall economic growth for 2025 at approximately two percent, noting that even if the economy stagnates in the third and fourth quarters, annual growth would still reach a respectable 1.8 percent.