Czech economy projected to grow 2% amid shifting market structures

The Czech economy is projected to grow by 2% this year, according to the Czech Banking Association (CBA), with an expected acceleration to 2.3% in 2027. While the overall growth rate remains steady, the structure is shifting toward stronger household consumption, investment, and exports, supported by rising wages and credit activity. The CBA has also lowered its average consumer inflation forecast for this year to 2.0%, primarily due to favorable food price trends.

The housing and construction sectors show mixed trends. Nationwide, new residential construction increased by nearly 40% in the first half of the year, with significant growth in regions like Olomouc and Pardubice. However, the number of completed dwellings has seen a slight decline. In the credit market, building savings banks reported a 33% year-on-year increase in unsecured loans, totaling 23.7 billion CZK, as households increasingly fund renovations and energy-efficiency measures.

Despite these economic indicators, social challenges persist. Average pensions have seen minimal growth, rising by only 10 CZK between March and June. Additionally, the rental market remains pressured, particularly for students in major cities like Prague and Brno, where rental costs for shared accommodations continue to climb.