The Czech Banking Association has downgraded its growth outlook for the domestic economy this year to 1.7%. The February macroeconomic forecast had expected growth of 2.1%. The negative impact of the trade wars and the uncertainty associated with them contributed significantly to the lower outlook. Next year, the growth rate should accelerate slightly to 2.0%.
CBA Forecast
The CBA forecast is produced each quarter as a consensus forecast of selected domestic banks. A basic summary of the current CBA forecast in several figures and comments is outlined below, detailed information can be found in the "CBA Forecast" section.
GDP
0
% yoy
year 2025 | 2026
The domestic economy is expected to accelerate to 1.7% this year and further to 2% yoy growth next year after 1% growth last year.
Unemployment
0
%
year 2025 | 2026
We expect unemployment to rise slightly to 4.2% this year from 3.8% in 2024, with the expectation that it will stabilise at 4.1% next year.
Average wages
0
%
year 2025 | 2026
Average wage growth is expected to slow slightly to 5.9% from 7.1% last year and further to 4.9% next year.
Inflation
0
% yoy
year 2025 | 2026
Consumer price growth of 2.3% year-on-year this year should almost repeat last year's performance of 2.4% and we also expect only a further slight slowdown next year.
CNB 2-week repo rate
0
%
end of 2025
The CNB will continue with the gradual reduction of the repo rate to 3.25% this year and further to 3% in 2026, where risks are skewed in both directions.
The Crown
0
CZK/€
end of 2025
The interest rate differential remained supportive of a modest appreciation of the koruna, but consumption-led growth, accompanied by weaker export activity and uncertainty over tariff wars, represented a significant obstacle.
The Czech economy will grow more slowly this year, by 1.7%. This is expected by the CBA macroeconomic forecast. The negative impact of trade wars and the uncertainty associated with them have significantly contributed to the worse outlook. Next year, the growth rate should accelerate slightly to 2.0%.
May 2025: the CBA has downgraded the outlook for the Czech economy. It will grow by 1.7% this year, 2% next year. Economists predict 12% US tariffs
Economic commentary by Jaromir Šindel, Chief Economist of the CBA
The Czech economy will grow by 2.1% this year. According to the CBA's macroeconomic forecast. The outlook is significantly affected by the uncertainty of trade wars. In the baseline scenario, we expect consumer prices to grow by a similar annual rate of 2.4% this year as last year, with only a slight slowdown to 2.2% in 2026.
The domestic economy will grow by 2.1% this year, according to the CBA's macroeconomic forecast. The outlook is significantly affected by uncertainty about the onset of trade wars. In the baseline scenario, we expect consumer prices to grow by a similar annual rate of 2.4% this year as last year, with only a slight slowdown to 2.2% in 2026. The CNB's interest rates are likely to continue to fall gradually, with the two-week repo rate reaching 3.25% this year and 3% next year.
February 2025: the CBA worsened the economic outlook
The domestic economy would grow by 1% year on year this year, similar to the value expected in the previous forecast. GDP is forecast to accelerate by 2.3% next year. Compared to the previous forecast, the estimate for 2025 has been revised downwards by almost half a percentage point, mainly due to weaker developments abroad.
The Czech economy will grow by 1% year-on-year this year, with GDP forecast to accelerate by 2.3% next year. Compared to the previous forecast, the estimate for 2025 has been revised downwards by almost half a percentage point, mainly due to weaker developments abroad.
November 2024: Domestic economic growth will be moderate this year, targets just above 2% next year, but slower than expected in the August forecast
The domestic economy will grow more slowly than expected this year. Annual growth will be 0.9%, down half a percentage point from the May forecast. The weaker development is linked to the unfavourable outlook for foreign demand.
The domestic economy will grow more slowly than expected this year. Annual growth will be 0.9%, down half a percentage point from the May forecast. The weaker development is linked to the unfavourable outlook for foreign demand. In the next episode, we will interview economist Jaromír Šindel.
August 2024: Growth of the domestic economy will be weaker this year, the optimistic expectations from the previous forecast have not been met
Economic commentary by Jakub Seidler, Chief Economist of the CBA
May 2024: This year's recovery will be gradual, growth should accelerate next year, inflation will remain at the central bank's 2% target this year and next
February 2024: The domestic economy will recover slowly this year. Growth expected to be only 1.2%, inflation close to central bank's target