Summary of the Forecast

English version of the April Macroeconomic Forecast will be released in the week of 13 April.

At the start of the year, the global economy was in an environment of stabilised inflation, which continued to support growth in real household incomes and consumption. Earlier easing of monetary conditions contributed to a gradual recovery in investment activity. However, global economic activity is currently threatened by higher prices for energy commodities and other raw materials following the March escalation of the conflict in the Middle East, which is also undermining consumer and business confidence. Further escalation could once again disrupt supply chains for an extended period. The baseline forecast scenario assumes an early de-escalation – the observed significant rise in commodity prices should therefore be temporary and without significant macroeconomic impacts.

Tensions in international trade remain high, particularly as a result of measures taken by the current US administration. Uncertainty regarding tariffs has been further exacerbated by a ruling of the US Supreme Court – the law invoked does not authorise the President to unilaterally and indefinitely impose tariffs without the express authorisation of Congress. However, the US government has responded by imposing temporary 10% across-the-board tariffs under a different law and is preparing a transition to a more permanent tariff regime.

For the whole of 2025, GDP grew by 2.6%. Household consumption was supported by strong growth in real wages and a year-on-year decline in the savings rate. This positive development was dampened by a slight rise in the unemployment rate, which slowed the pace of consumption, particularly among low-income households. Thanks to public investment, strongly supported by European Union funds, gross fixed capital formation increased. The renewed accumulation of inventories and general government consumption also contributed positively to economic growth. The balance of trade had a negative impact on GDP growth, primarily due to higher imports driven by rising consumer and investment demand and inventory build-up. In 2026, economic growth could slow to 2.1%. Growth will continue to be driven exclusively by domestic demand, which will, however, be held back by increased uncertainty and rising energy prices due to the conflict in the Middle East. In addition to continued growth in household consumption, there will be a revival in corporate investment activity. All this will increase the volume of imports, whilst the export side will, conversely, be constrained by heightened trade barriers and the continued low volume of export orders. In 2027, GDP could rise by 2.4% thanks to an acceleration in economic growth among key trading partners and continued growth in domestic economic activity.

Average inflation in 2025 reached 2.5%. At the start of this year, year-on-year price growth reached its lowest levels in nearly a decade. Price growth for services remained elevated, primarily due to the costs of owner-occupied housing and rent. By contrast, price trends for goods were dampened by lower energy prices, exacerbated by the transfer of funding for subsidies for renewable energy sources to the State Budget. Inflationary pressures continue to be dampened by the restrictive monetary policy stance and the strong koruna, which makes imports cheaper. The military escalation in the Middle East in March and the blockade of the Strait of Hormuz caused a sharp rise in energy prices. Assuming a timely stabilisation of commodity markets and the absence of long-term constraints on oil and natural gas production capacity, the average inflation rate could remain at 2.5% this year and rise to 2.8% next year.

In the labour market, the average unemployment rate reached 2.8% last year and the volume of wages and salaries increased by 7.9%. Imbalances linked to labour shortages continue to be evident. Whilst the downturn in industry persists, it is partly offset by high demand for labour in services and construction. The unemployment rate is therefore expected to rise slightly to 2.9% this year and fall to 2.7% next year. The persistent mismatch between supply and demand in the labour market will prevent any significant slowdown in wage growth. Real earnings are expected to rise significantly this year and next.

The current account of the balance of payments ended last year with a surplus of 0.7% of GDP. The year-on-year deterioration in the external position was driven, among other things, by a reduction in the goods surplus. For this year, we expect a deficit of 0.6% of GDP, driven by stronger investment activity, higher prices of imported energy commodities and persistent constraints on the export side. In 2027, the deficit will then ease to 0.4% of GDP, aided by the expected improvement in the performance of our trading partners and the easing of price pressures on energy commodities.

In 2025, the general government sector recorded a deficit of 2.1% of GDP. Despite the ongoing economic recovery, the general government balance deteriorated slightly by 0.1 percentage points year-on-year due to a significant acceleration in investment, rising employee compensation, social benefits and subsidies. The general government debt-to-GDP ratio reached 44.3%. This year, we expect the general government deficit to stand at 2.6% of GDP and the debt-to-GDP ratio to rise to 45.6%.

Overall, we consider the risks to the economic growth forecast to be significantly skewed to the downside. The main uncertainties include the conflict in the Middle East and the associated disruption to energy markets, and US trade policy. 

Tables and Graphs

Preparation of the Macroeconomic Forecasts

Evaluation of Forecasting History at the Ministry of Finance

Information

• The Macroeconomic Forecast is prepared by the Economic Policy Department of the Czech Ministry of Finance. It contains forecast for the years 2026 and 2027, and for certain indicators an outlook for the 2 following years (i.e. until 2029). It is published on a quarterly basis (in January, April, August and November).
• 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)mf.gov.cz
• Cut-off Date for Data Sources: The Macroeconomic Forecast is based on data known as of 31 March 2026.