The Organisation for Economic Co-operation and Development (OECD) has revised its growth forecast for the Czech economy, reducing its estimate for 2025 to 1.9% from the previously projected 2.1%. The outlook for 2026 has also been lowered, from 2.5% to 2.2%. According to the OECD’s updated report, uncertainty in trade policy and tariffs, particularly in the automotive sector, remain significant risks to economic performance. In 2024, the Czech economy grew by 1%. Globally, the OECD downgraded its growth forecast to 2.9% for both this year and next, down from 3.1% and 3.0%, respectively, in its March outlook. The organization attributed the weaker outlook to ongoing trade policy uncertainty, tighter financial conditions, and broader geopolitical tensions. The OECD noted that economic growth in the Czech Republic will be driven primarily by private consumption, supported by rising real household incomes. However, investment is expected to be constrained by continued trade uncertainty. The report also identified potential risks from escalating geopolitical tensions, including disruptions to supply chains. While the OECD did not specify sources of geopolitical tension in detail, it referenced broader concerns related to recent tariff policies introduced by the U.S. and the ongoing war in Ukraine. Inflation in the Czech Republic is expected to decline to the Czech National Bank’s 2% target during 2025. Employment growth is forecast to continue, particularly in the services sector. The report also recommended that the Czech Republic finalize pension system reforms to enhance long-term sustainability. Additionally, it highlighted the importance of developing the capital market and streamlining regulations to facilitate business entry and expansion as a means of supporting investment and economic dynamism. Founded in 1961, the OECD currently consists of 38 member countries. The Czech Republic joined the organization in December 1995. On a global scale, the OECD expects slower growth compared to previous projections, warning that further increases in tariffs and retaliatory measures could exacerbate the slowdown and disrupt international supply chains. Last year, the world economy grew by 3.3%, but the OECD now anticipates lower growth rates for major economies, including the United States, Canada, Mexico, and China. For the United States, the OECD forecasts growth to slow to 1.6% this year from 2.8% in 2024, with 2026 growth projected at 1.5%. In March, the forecasts were higher, at 2.2% for this year and 1.6% for next year. In the euro area, growth is expected to accelerate slightly, with GDP projected to expand by 1.0% this year and 1.2% next year, consistent with the OECD’s earlier estimates. The euro area recorded 0.8% growth in 2024.