PRAGUE, April 10 (Xinhua) -- Despite a 0.3 percent drop in the Czech Republic's gross domestic product (GDP) in 2023, the country's economy is expected to grow by 1.4 percent this year, the country's Ministry of Finance said on Wednesday.
In its April macroeconomic forecast, the ministry said new growth is mainly due to renewed increase in household consumption and a softer decline in gross capital formation. In 2025, GDP is predicted to grow by 2.6 percent on the back of stronger momentum in all components of domestic demand and more favorable economic developments abroad.
Commenting on the forecast, Finance Minister Zbynek Stanjura said the GDP growth is "even slightly higher than we expected in January." He noted that the economy should surpass levels before the COVID-19 pandemic sometime this year. In its previous forecast in January, the ministry expected an economic growth of 1.2 percent in 2024.
In the April forecast, the ministry also predicted that inflation will "stay below 3 percent for most of 2024, before falling towards 2 percent in 2025." The average inflation rate could fall to 2.7 percent this year, and 2.4 percent in 2025.
According to figures released Wednesday by the Czech Statistical Office, inflation in the country rose by 2 percent year-on-year in March, the same as the previous month.
The finance ministry has a more optimistic prognosis for the economy than other institutions. In its most recent prediction released in February, the Czech National Bank predicted a 0.6 percent GDP growth this year and an average inflation of 2.6 percent.
