The Czech economy recorded modest growth in 2024. Real wage growth boosted domestic demand and improved results in the services sector. In contrast, industry experienced weaker demand from abroad.
Gross domestic product in the Czech Republic increased by 1.0% in 2024. Growth gained momentum over the course of the year, with the economy expanding by 1.8% in the fourth quarter and by 0.7% compared to the previous quarter. “Real household incomes rose last year, which further fuelled private consumption growth. However, subdued confidence among both households and businesses led to a decline in investment. While the export-oriented industry struggled with weak foreign demand, the services sector developed positively. Overall, the Czech economy grew by 1% in 2024,” explained Jaroslav Sixta, Deputy Chairman of the Czech Statistical Office (ČSÚ).
Gross value added rose by 0.3% last year. However, the overall year was marked by weak performance in manufacturing, where value added declined by 1.6%. This was offset by the services sector, which benefited from rising consumer demand. In the fourth quarter, gross value added remained unchanged from the previous quarter but grew by 1.1% year-on-year. While industry remained weak, the real estate sector saw a notable upturn towards the end of the year, and significant improvements were also observed in trade, transport, accommodation, and hospitality.
Consumer prices rose by 2.4% in 2024, the lowest increase since 2018. The sharp drop in inflation compared to 2023 was driven by slower price increases in housing and energy, as well as declining prices for food and non-alcoholic beverages. However, inflation accelerated again in the fourth quarter, reaching an annual rate of 2.9%. This was primarily due to a renewed rise in food prices at the end of 2024. Additionally, price growth in real estate and agricultural products gained momentum.
The average gross monthly wage increased by 7.1% in nominal terms and by 4.6% in real terms last year. Despite one of the strongest gains in purchasing power over the past two decades, real average wages had yet to return to 2019 levels. In the fourth quarter of 2024, the average nominal income rose to 49,229 koruna, marking a 7.2% increase year-on-year and a 1.7% rise compared to the third quarter. Overall employment increased by 0.3% in 2024, with nearly all of the growth occurring in the services sector.
