The Czech Republic’s consumer confidence index has climbed sharply in November 2025, reaching 111.70, a 4.00-point increase from October and a 14.00-point rise compared to the average of the past 12 months (97.70). This rebound reflects improving consumer optimism despite ongoing global uncertainties. The geographic scope covers the entire Czech economy, with data collected nationwide and seasonally adjusted for comparability.

Drivers this month

• Improved labor market conditions with unemployment steady at 3.40%
• Moderation in inflation pressures, with CPI easing to 3.10% YoY from 3.50%
• Stable wage growth supporting disposable income
• Positive sentiment from easing energy prices

Policy pulse

The Czech National Bank (CNB) has maintained its key interest rate at 7.00%, signaling a pause after a series of hikes earlier in 2025. This stance aligns with the confidence uptick, as inflation shows signs of peaking. The current confidence level sits comfortably above the long-term average of 98.50, suggesting consumers are more optimistic about near-term economic prospects relative to previous tightening cycles.

Market lens

Immediate reaction: The CZK strengthened modestly against the euro, appreciating 0.30% within the first hour post-release. Short-term government bond yields edged down by 5 basis points, reflecting improved risk sentiment.

Consumer confidence is a leading indicator for household spending, which accounts for roughly 55% of Czech GDP. The recent rise coincides with stable GDP growth of 2.80% YoY in Q3 2025 and a steady unemployment rate near historic lows. Inflation has moderated but remains above the CNB’s 2% target, influencing real wage dynamics.

Monetary Policy & Financial Conditions

The CNB’s decision to hold rates steady after a cumulative 250 basis point hike since late 2024 has helped stabilize borrowing costs. Credit growth remains moderate at 4.50% YoY, supporting consumer loans and mortgages. Financial conditions have eased slightly, aiding confidence.

Fiscal Policy & Government Budget

Fiscal policy remains mildly expansionary, with the government increasing social transfers and infrastructure spending in 2025. The budget deficit is projected at 2.80% of GDP, slightly above the EU average but manageable. This fiscal support underpins household incomes and consumption.

External Shocks & Geopolitical Risks

Risks from regional geopolitical tensions and global supply chain disruptions persist but have not intensified recently. Energy price volatility has decreased, easing cost pressures on consumers. However, uncertainties around EU trade policies and global inflation remain downside risks.

Drivers this month

• Energy cost relief contributed 0.25 points
• Labor market optimism added 0.18 points
• Improved credit availability added 0.12 points
• Concerns over inflation subtracted -0.05 points

Policy pulse

The CNB’s steady rate policy aligns with the confidence rebound, as inflation moderates from a peak of 4.20% in mid-2025 to 3.10% currently. This suggests monetary policy is effectively balancing growth and price stability.

Market lens

Immediate reaction: The CZK/EUR exchange rate appreciated 0.30%, while 2-year government bond yields fell 5 basis points, reflecting improved sentiment and lower inflation risk premia.

Looking ahead, consumer confidence in CZ faces a mix of supportive and challenging factors. The baseline scenario projects confidence stabilizing around 110–113 over the next six months, underpinned by steady wage growth and contained inflation. The bullish scenario (30% probability) sees confidence rising above 115, driven by stronger fiscal stimulus and global economic recovery. The bearish scenario (25% probability) involves a drop below 105 if inflation resurges or geopolitical tensions escalate, dampening consumer spending.

Upside risks

• Further easing of energy prices
• EU economic rebound boosting exports and incomes
• Additional fiscal measures supporting households

Downside risks

• Renewed inflationary pressures from supply shocks
• Geopolitical instability affecting trade and investment
• Monetary tightening if inflation fails to moderate

Structural & Long-Run Trends

Long-term trends such as digitalization, demographic shifts, and EU integration continue to shape consumer behavior. Rising urbanization and higher education levels support sustained consumption growth, while aging populations may temper demand in certain sectors.

The November 2025 consumer confidence reading of 111.70 signals a meaningful rebound in Czech household sentiment. Supported by stable macro fundamentals and prudent monetary policy, this upswing bodes well for domestic demand and economic growth. However, vigilance is warranted given persistent inflation risks and geopolitical uncertainties. Policymakers and investors should monitor inflation trends and external shocks closely to navigate the evolving landscape.

Key Markets Likely to React to Consumer Confidence

Consumer confidence is a key driver of Czech financial markets, influencing currency strength, bond yields, and equity valuations. The following symbols historically track CZ consumer sentiment closely:

• CZKEUR – The Czech koruna’s exchange rate against the euro often strengthens with rising confidence.
• CEZ – The leading Czech utility stock, sensitive to domestic economic conditions.
• OML – A major Czech industrial stock, reflecting manufacturing and consumer demand.
• USDCHF – Swiss franc pairs often react inversely to risk sentiment shifts linked to CZ confidence.
• BTCUSD – Bitcoin’s price can reflect broader risk appetite changes tied to consumer sentiment.

FAQs

What is the current level of Consumer Confidence in CZ?

The latest reading is 111.70 as of November 2025, marking a significant increase from 107.40 in October.

How does Consumer Confidence impact the Czech economy?

Higher confidence typically leads to increased household spending, supporting GDP growth and financial market stability.

What are the main risks to Consumer Confidence in CZ?

Key risks include inflation resurgence, geopolitical tensions, and potential monetary tightening.

Takeaway: The Czech Republic’s consumer confidence surge in November 2025 signals robust household optimism, underpinning a positive near-term economic outlook amid manageable risks.