Macroeconomic Forecast - August 2025
Summary of the Forecast
English version of the August Macroeconomic Forecast will be released in the week of 25 August.
Global economic growth continues to benefit from weakening inflation, which is providing impetus to the momentum in household consumption spending. In contrast, investment activity in a number of countries has been constrained by restrictive monetary policies combined with heightened geopolitical instability.
Global economic activity is hampered by uncertainties related to trade policy and other measures taken by the US administration, which have resulted in a decline in consumer and business confidence. The macroeconomic forecast assumes universal tariffs of 15% on most commodities exported from EU countries to the US. The effects of the tariffs should dampen economic activity in EU countries slightly. On the other hand, the fiscal and tax package approved in Germany should be a positive stimulus, which should have a pro-growth effect in a number of other EU countries, including the Czech Republic.
According to the flash estimate of the Czech Statistical Office, real gross domestic product of the Czech Republic, adjusted for seasonal and calendar effects, increased by 0.2% QoQ and by 2.4% YoY in Q2 2025. In Q1 2025, for which detailed data on the structure of growth are available, GDP grew by 2.4% YoY (unadjusted). According to the revised national accounts, the Czech economy stagnated in 2023 and GDP grew by 1.2% last year.
In 2025, GDP could grow by 2.1%, mainly thanks to an acceleration in household consumption spending, stimulated by a rise in real incomes and a lower savings rate. Inventory accumulation and government consumption should also support economic growth. In 2026, the Czech economy could grow by 2.0% thanks to renewed growth in investment activity and continued momentum in household consumption. At the same time, the increase in domestic demand will be supported by imports, while exports will be dampened by tariffs from the US, and the foreign trade balance should reduce economic activity more than this year.
Annual inflation has so far been almost exclusively between 2.5% and 3%. Its volatility has been driven mainly by the base effect of the price level last year, but also by volatility in food and fuel prices. Monetary policy will continue to moderate inflationary pressures through interest rates over the forecast horizon, given the lag in transmission. The expected decline in the dollar oil price, the appreciation of the koruna and, this year, lower energy prices will have an anti-inflationary effect. On the other hand, continued dynamic wage growth, rising excise duties on tobacco products and alcohol, as well as persistently elevated price dynamics for services, mainly due to strong growth in the imputed rent and rental, will be inflationary factors. The average inflation rate could reach 2.4% this year and fall slightly to 2.3% in 2026.
Labour market imbalances related to labour shortages continue to manifest themselves despite a partial cooling. Demand for labour in services and construction remains strong, helping to mitigate the impact of problems in some industries. As a result, the unemployment rate could remain at 2.6% on average this year and rise slightly to 2.7% next year. The persistent mismatch between supply and demand in the labour market does not allow for a significant slowdown in wage and salary growth. Real earnings should increase in both years of the forecast.
The current account of the balance of payments ended with a surplus of 1.8% of GDP in Q1 2025. The significant YoY improvement in the external balance is mainly due to an increase in the goods surplus, driven by growth in exports of capital goods and increased external demand for electricity. In addition to domestic demand, the introduction of tariffs on imports into the US, which will limit EU exports, will be a key factor in the future development of the current account. For this year, we expect the current account surplus to narrow to 1.2% of GDP due to the above. In 2026, the positive balance will ease further to 0.5% of GDP on the back of recovering investment activity.
The general government sector is expected to end 2025 with a slightly lower deficit of 1.9% of GDP year-on-year, despite higher spending on education, defence and transport infrastructure. With lower nominal GDP growth, government debt is expected to increase by 0.9 pp to 44.2% of GDP.
Overall, we consider the risks to the economic growth forecast to be skewed to the downside. The main uncertainties include geopolitical tensions, tariffs and other international trade barriers, possible renewed problems in supply chains, continued strong price growth in services, and volatility in energy and raw material prices. In terms of economic policies, it concerns possible changes in the fiscal policies of EU countries, whether in the context of increasing defence spending or in a form similar to the German stimulus package.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2025 | 2026 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Current forecast | Previous forecast | |||||||||
| Nominal GDP | bill. CZK | 5 828 | 6 308 | 7 050 | 7 660 | 8 057 | 8 454 | 8 832 | 8 391 | 8 787 |
| nominal growth in % | -1,0 | 8,2 | 11,8 | 8,6 | 5,2 | 4,9 | 4,5 | 4,7 | 4,7 | |
| Gross domestic product | real growth in % | -5,3 | 4,0 | 2,8 | 0,0 | 1,2 | 2,1 | 2,0 | 2,0 | 2,4 |
| Consumption of households | real growth in % | -6,4 | 4,2 | 0,5 | -2,6 | 2,4 | 3,0 | 2,9 | 3,6 | 3,2 |
| Consumption of government | real growth in % | 4,1 | 1,5 | 0,4 | 3,2 | 3,2 | 1,9 | 1,4 | 2,0 | 1,4 |
| Gross fixed capital formation | real growth in % | -4,8 | 6,7 | 6,3 | 4,2 | -2,8 | 0,1 | 2,9 | 0,7 | 3,1 |
| Contribution of net exports | pp | -0,6 | -2,8 | -0,3 | 2,6 | 0,7 | -0,4 | -0,5 | -1,0 | -0,5 |
| Contrib. of change in inventories | pp | -1,2 | 2,8 | 1,2 | -3,0 | -0,5 | 0,7 | 0,1 | 0,7 | 0,2 |
| GDP deflator | growth in % | 4,5 | 4,0 | 8,7 | 8,6 | 3,9 | 2,8 | 2,5 | 2,7 | 2,3 |
| Average inflation rate | % | 3,2 | 3,8 | 15,1 | 10,7 | 2,4 | 2,4 | 2,3 | 2,4 | 2,3 |
| Employment (national accounts) | growth in % | -2,3 | 1,0 | 1,0 | 1,6 | 0,6 | 1,0 | 0,1 | 0,2 | 0,1 |
| Unemployment rate (LFS) | average in % | 2,6 | 2,8 | 2,2 | 2,6 | 2,6 | 2,6 | 2,7 | 2,6 | 2,5 |
| Wage bill (domestic concept) | growth in % | 0,4 | 7,2 | 9,1 | 8,8 | 6,8 | 6,6 | 5,4 | 6,6 | 5,6 |
| Current account balance | % of GDP | 1,8 | -2,1 | -4,7 | -0,1 | 1,7 | 1,2 | 0,5 | 0,7 | 0,1 |
| General government balance | % of GDP | -5,6 | -5,0 | -3,1 | -3,7 | -2,0 | -1,9 | . | -2,2 | -2,0 |
| General government debt | % of GDP | 36,9 | 40,7 | 42,5 | 42,2 | 43,3 | 44,2 | . | 44,5 | 45,1 |
| Assumptions: | ||||||||||
| Exchange rate CZK/EUR | 26,4 | 25,6 | 24,6 | 24,0 | 25,1 | 24,8 | 24,4 | 24,9 | 24,5 | |
| Long-term interest rates | % p.a. | 1,1 | 1,9 | 4,3 | 4,4 | 4,0 | 4,2 | 4,1 | 4,1 | 3,7 |
| Crude oil Brent | USD/barrel | 42 | 71 | 101 | 82 | 81 | 70 | 67 | 72 | 68 |
| GDP in the euro area | real growth in % | -6,2 | 6,3 | 3,6 | 0,7 | 0,9 | 1,2 | 1,3 | 0,7 | 1,4 |
Tables and Graphs
Preparation of the Macroeconomic Forecasts
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Updated: 21.8.2025
Information
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The Macroeconomic Forecast is prepared by the Economic Policy Department of the Czech Ministry of Finance. It contains forecast for the years 2025 and 2026, and for certain indicators an outlook for the 2 following years (i.e. until 2028). It is published on a quarterly basis (in January, April, August and November).
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Any comments or suggestions that would help us improve the quality of our publication and closer satisfy the needs of its users are welcome. Please send any comments to the following email address: macroeconomic.forecast(at)mfcr.cz
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Cut-off Date for Data Sources: The Macroeconomic Forecast is based on data known as of 11 August 2025.