The energy price shock sparked by the Iran war is set to hold back Italy's growth for the next two years, the OECD argued in a new report on Thursday, saying it has cut its forecast rise in its GDP to 0.4% this year and 0.6% in 2027.
    "The global surge in energy prices in 2026 is expected to weigh on growth over the next two years," the Paris-based organization said in its latest economic survey of Italy.
    "Weaker growth in household consumption, production and investment is expected to slow GDP growth to 0.4% in 2026, a similar drag to growth as other OECD countries.
    "Output growth is expected to pick up to 0.6% in 2027 with increasing capital formation and stabilising external conditions supports households' spending".
    The report said Italy's economy has proved resilient in the face of recent global shocks.
    But it said medium-term growth prospects are weighed down by high public debt, population ageing, and rising uncertainty linked to global trade policy, geopolitical tensions and stronger international competition.
    It said reforms and investments under the EU-funded National Recovery and Resilience Plan (NRRP) were helping to address long-standing structural weaknesses.
    "Ensuring that public debt declines durably will require improving spending efficiency, containing pension-related pressures, strengthening tax compliance and making the tax mix more supportive of growth," it said.
    "Population ageing heightens the need to improve labour market outcomes for young people, many of whom are out of training or work, or emigrate, by strengthening school-to-work transitions, expanding high-quality vocational and technical education, reducing labour market duality and supporting their disposable incomes.
    "Reducing energy costs and volatility through faster deployment of renewable generation, transmission and storage would strengthen competitiveness and household well-being".

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