Jun 10, 2025

Inflation in Prague Rising at Double the National Rate, Data Shows

Avatar

Prague Morning

Prague’s cost of living is rising at twice the national pace, according to new data from the Czech Statistical Office.

While the Czech Republic recorded an average inflation rate of 2.4% in May, prices in the capital climbed by 3.6%, underscoring Prague’s growing economic disconnect from the rest of the country.

This gap isn’t just about numbers—it reflects deeper structural differences in housing, services, and lifestyle patterns in the city compared to the rest of Czechia.

“Inflation in Prague stands out due to faster growth in housing costs,” says Petr Dufek, chief economist at Creditas Bank. “Just the increase in apartment prices alone added 0.7 percentage points to the city’s inflation.”

Although the Czech National Bank (CNB) has mostly kept inflation within its target range of 2% ± 1 percentage point, Prague is becoming a statistical outlier.

Housing and services are the main culprits. According to economist David Marek from Deloitte, services make up a larger part of consumer spending in Prague than elsewhere in the country.

This shift in consumer behavior contributes to higher localized inflation, particularly as service prices continue to climb faster than those of goods.

A breakdown of inflation reveals the largest price increases occurred in food, accommodation, culture, and education—sectors where Prague consistently outpaces the rest of the country. For example:

  • Food and accommodation costs rose by 5.3% in Prague, compared to 4.6% nationwide.
  • Grocery prices climbed 5.6% in the capital, slightly more than the 5.4% national average.
  • Spending on culture and education surged by more than 8% year-on-year in Prague.

Some price categories did offer minor relief. Costs for telecommunications, household goods, and some services dipped slightly in Prague, but these savings were outweighed by rising energy prices, which hit consumers across the country.

This inflationary divergence is nothing new. In 2023, the cost of living in Prague rose by 4%, while the national average increase was just 3%. These differences continue to reinforce the notion of Prague as a “state within a state”—with its own economic rhythm.

While May’s national inflation figure of 2.4% was only slightly above the CNB’s forecast, central bankers remain cautious.

Petr Sklenář, head of the CNB’s monetary section, noted that price stability has not yet been fully restored, warning that monetary policy must proceed carefully.

Would you like us to write about your business? Find out more

Tell more about your business

Tell us about your.

Tell us about your.

Tell us about your.

Tell us about your.

Tell us about your.

Thank You, It`s All Good

We will come back to you within 24 housr with our proporsal

Tell us about your.

Search