S&P Raises Czech Rating Outlook from Stable to Positive

The international rating agency S&P has improved the outlook on Czechia's long-term credit rating from stable to positive, while keeping the rating itself at AA- in foreign currency and AA in local currency. According to the agency's estimate, the Czech economy will grow by an average of 2.3% per year between 2026 and 2029.

Among the reasons for the revised outlook, S&P cited the resilience of the Czech economy to external shocks, the sound state of public finances and the external financial balance, and the effective monetary policy of the Czech National Bank. The economy grew by 1.9% year-on-year in the second quarter, and S&P forecasts growth of 2% this year and 2.4% next year. Consumption will be supported by a strong labour market and rising wages, while exports will benefit from a recovery in the German economy.

S&P noted that if economic growth continues, Czechia's rating could be upgraded within one to two years. At the same time, the agency pointed to risks: rising energy prices, developments in the Middle East, and a looser fiscal policy from the Czech government.

According to S&P's forecast, Czechia's public finance deficit will average around 3% of GDP in 2026-2029, while net public debt will rise to 38% of GDP by 2029, up from 31% last year.

Around Prague, based on reporting by seznamzpravy.cz