Inside Czech Republic 2026: 7 Surprising Reasons Travelers Are Flocking to Europe’s Hidden Gem

Prague – A flurry of political and economic developments is keeping the Czech Republic in the international spotlight this week as lawmakers debate high-profile immunity cases, analysts dissect a fresh IMF review and businesses brace for new tax breaks. Parliament weighs lifting immunity for opposition heavyweights The Chamber of Deputies’ Mandate and Immunity Committee is expected to decide within days whether former prime minister Andrej Babiš (ANO) and right-wing SPD leader Tomio Okamura will face criminal proceedings over alleged misuse of EU subsidies and campaign finances, respectively. The showdown could reshape the balance of power before regional elections later this year. Pavel still tops trust rankings as voters eye reform agenda Despite the brewing parliamentary storm, President Petr Pavel continues to enjoy the highest public trust of any Czech politician, according to a February survey by STEM/MARK. Fifty-seven percent of respondents say they “definitely” or “rather” trust the former NATO general, far ahead of Babiš on 31 percent. Observers note that Pavel’s approval gives the government crucial cover to advance defense and public-sector pay reforms. IMF hails solid growth but flags labour shortage In its 2026 Article IV review, the International Monetary Fund praised Czechia’s “robust” 2.9 percent GDP expansion and falling inflation, yet warned that an ageing workforce and sluggish housing construction could cap potential output if structural bottlenecks persist. Cabinet promises lower corporate tax and simpler registration Finance Minister Zbyněk Stanjura has ruled out across-the-board tax hikes and instead signalled a cut in corporate income tax to 18 percent, a move welcomed by exporters battling a strong koruna. Separately, Interior officials are drafting a light-touch online registration scheme for EU citizens staying longer than 90 days, aiming to plug gaps in population data without reviving pre-2021 bureaucracy. Humanitarian aid and energy security dominate foreign policy Czech charities have now channelled a record-breaking CZK 3.4 billion (€138 million) to Ukraine since the start of the full-scale invasion—a show of solidarity President Pavel says will “not waver even if peace talks stall”. On energy, Prague has offered Slovakia limited east-bound crude via the Druzhba pipeline to compensate for disruptions on its western leg, underscoring the region’s shifting supply routes. Castle message: don’t expect détente with Moscow Commenting on prospects for a negotiated end to the Russia-Ukraine war, Czech President-emeritus Miloš Zeman said a settlement would not erase “fundamental strategic rifts” between the West and the Kremlin, signalling Prague’s continued hawkish stance even after any cease-fire. Hospitality sector pushes for legalised tipping At home, restaurateurs are lobbying for a U.S.-style system that would let employers list “suggested gratuities” on bills. Proponents argue the change could ease labour shortages by boosting take-home pay, while critics fear it will simply raise prices for tourists. What it means for travellers and investors • Tourism outlook: Prague hotel occupancy is already above 2019 levels; a tipping shake-up and simplified EU registration could make the market more competitive. • Business climate: A lower profit tax, steady growth and resilient consumer demand strengthen the case for manufacturing and tech FDI, though wages are set to climb. • Political risk: Potential indictments of Babiš or Okamura may heat up the autumn campaign but are unlikely to derail coalition stability given Pavel’s popularity. Bottom line With solid macro numbers, looming tax cuts and high-stakes political theatre, the Czech Republic offers a rare mix of stability and intrigue—conditions that keep investors engaged, tourists curious and the global search engines buzzing.