Households in the Czech Republic are expected to earn more in real terms in 2026, as wages adjusted for inflation are forecast to grow at one of the fastest rates in Europe.

New economic projections point to a year of recovery after several difficult years marked by high inflation and falling living standards.

According to forecasts published by Euronews, the Czech Republic is set to rank second among European Union countries for real wage growth.

Real wages, which reflect income adjusted for price changes, are projected to increase by 2.7 percent. The same rate is expected in Bulgaria and Poland, placing the three countries just behind Hungary, which is forecast to lead the EU with growth of 3.5 percent.

Elsewhere in Central Europe, wage growth is expected to be more modest. In Slovakia, for example, real wages are predicted to rise by around 1.9 percent.

The European Commission’s outlook broadly supports these expectations. While nominal wages in the Czech Republic are forecast to rise by roughly five percent in 2026, the key figure for households is the real increase after accounting for price pressures.

Economists see this as a sign that incomes will finally start to catch up with the cost-of-living surge seen in recent years.

Even so, analysts caution against reading the figures as a full return to past prosperity. The gains projected for 2026 come after a period in which inflation sharply reduced purchasing power and pushed living standards back several years. “We have not yet reached the pre-Covid level, which means we are not back to where we were before 2021 or even 2019,” economist Petr Studnička told TN.cz.

Alongside wage growth, the Czech labor market is expected to remain strong by European standards. Unemployment is forecast to stay among the lowest in the EU, although it is projected to edge up gradually from 2.7 percent this year to about 2.9 percent in 2027. Despite this slight increase, employment levels are expected to remain high.

Household behavior is also set to adjust. Experts from the European Commission anticipate a gradual easing in the exceptionally high savings rates seen in recent years, as consumers begin to spend more.

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