Italy's real wages are expected to decline 0.9 percent in 2026, dragged down by a renewed surge in energy prices, according to the Organisation for Economic Co-operation and Development. The contraction marks the widest gap in purchasing power among major OECD economies, with real earnings in the first quarter of 2026 sitting 6.1 percent below early-2021 levels.
The outlook offers little relief for 2027, when real wage growth is projected at just 0.2 percent, as inflation is estimated at 3 percent this year before easing to 2.2 percent. Despite the wage squeeze, Italy's unemployment rate hit a record low of 5 percent in May 2026.
The Italian picture mirrors a broader OECD trend. Across the bloc, annual real wage growth slowed to 2.2 percent in the first quarter of 2026, down from 2.7 percent a year earlier, with real wages in a third of member countries still trailing pre-crisis levels.