CZECH REPUBLIC/PRAGUE – The Czech defense industry is experiencing extraordinary growth. According to available data, exports of military equipment in 2025 reached 115.4 billion crowns, representing a year-on-year increase of almost 23 percent. Compared to 2021, when the value of Czech military exports was approximately 15 billion crowns, this represents more than a sevenfold increase. A significant part of this development is due to the war in Ukraine and the associated European demand for weapons and ammunition. According to available data, Ukraine was the most important customer of Czech military production in 2025, accounting for approximately 46 percent of total exports.
The value of deliveries was expected to reach approximately 53.1 billion crowns. However, critics believe that the actual volume of Czech production destined for the Ukrainian front may be even higher, as some materials are formally exported to other countries and then transferred to Ukraine. The structure of exports also shows how significantly the orientation of the Czech defense industry has changed. Approximately 64 percent of exports to Ukraine consisted of rockets, guided missiles, explosive devices, and large-caliber ammunition. This is primarily material that can be directly used for conducting intensive military operations.
The War Has Changed the Czech Industry
The growth in defense exports is closely linked to the policy of the previous Czech government, which was one of the most prominent European supporters of Ukraine. Prague supported the supply of military equipment, participated in international initiatives aimed at acquiring ammunition, and simultaneously created conditions for expanding the production capacity of Czech arms manufacturers. The result is a significant shift of part of the industrial capacity towards defense production.
While the current situation represents record orders for arms companies, it raises questions from an economic perspective about whether the long-term concentration of investment and production capacity on military production may weaken other parts of the economy, especially the consumer sector. Czech arms manufacturers also expect that high demand will not be a short-term phenomenon. In response to the security situation, European countries are increasing their defense budgets and ordering new weapons systems, ammunition, and other military equipment. Czech companies can therefore benefit not only from the war in Ukraine but also from the long-term rearmament of European armies.
Record Growth Has Two Sides
From an economic point of view, the growth in defense exports represents a significant source of income for Czech companies, employment, and foreign trade. At the same time, it indicates a profound change in the priorities of Czech industrial policy. The difference between 2021 and today is striking. From approximately 15 billion crowns in military exports in 2021, Czech defense exports have grown over several years to exceed 115 billion crowns.
The Czech economy is undoubtedly benefiting from the current boom in the arms industry. However, the question remains whether this is a sustainable model of economic growth or primarily a consequence of an extraordinary situation associated with the war in Ukraine and extensive European rearmament.