In a remarkable economic turnaround, the Czech Republic’s economy has posted its strongest growth since mid-2022, with GDP expanding by 2.2% year-on-year in the first quarter of 2025. The Czech Statistical Office’s revised figures exceeded preliminary estimates, which had projected a 2% increase, while quarter-on-quarter growth reached 0.8%.
Consumer spending emerged as a key growth driver, with household consumption rising by 2.5% compared to the previous year. Government spending also contributed positively, increasing by 1.9%. The economy received an additional boost from inventory buildup, which added 13.6 billion crowns to the growth figures.
According to Vladimir Kermiet, Director of National Accounts at the Czech Statistical Office, household consumption and gross capital formation were the main quarterly growth catalysts. However, government spending showed a slight contraction, while foreign trade impact remained neutral.
The labor market showed robust performance, with wage costs climbing 7% year-on-year. Employment figures improved both quarterly (0.7%) and annually (1.1%), accompanied by an increase in total hours worked.
In a comprehensive assessment of economic sectors, gross value added grew by 2.5% year-on-year, with particularly strong performances in industry (1.4%) and the trade, transportation, accommodation, and food service sectors (2.8%).