War in Iran will cause additional inflation increase in Czechia

The war in Iran will be reflected in the Czech economy through an additional increase in inflation of between 0.2 and 1.9 percentage points. As a result, year-on-year inflation in 2026 will likely range between 1.8 and 3.5 percent. The expected loss of economic performance linked to rising oil prices will slow economic growth by 0.1 to 0.7 percentage points. This follows from an analysis provided to CTK by the company XTB.

The expected loss of economic output corresponds to a GDP loss of between 8.7 billion and 60 billion crowns. Despite this, economic growth is still expected to remain relatively strong, between 2.2 and 2.8 percent.

“Estimates suggest that inflation will respond to the war in Iran and rising commodity prices much faster than economic growth. It is also clear that a short-term shock in the form of higher oil prices will not be a catastrophe for the Czech economy,” XTB analyst Pavel Peterka told CTK.