Second half of 2026

Budget, Giorgetti: ‘Credibility we have built up is a real asset that must be preserved’. Istat: ‘The recovery in wages has stalled’

In particular, in the private sector, the year-on-year trend in wages for the period April to August remains below inflation

by Rome Editorial Staff

12 October 2026

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Manovra, Leo: "Crescita inflazione si riflette sui conti pubblici"

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Versione italiana

Key points

Household spending remains stable
Wage arrears remain unpaid
‘If tensions persist, GDP could fall by 0.2 per cent in 2027 and 0.4 per cent in 2028’

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Translated by AI

Versione italiana

“The credibility we have built up is a real asset that must be preserved.” This was stated by the Minister for the Economy, Giancarlo Giorgetti, during a hearing on the Dpfp, adding that this forms the basis for continuing to invest for the benefit of households and businesses. “The European procedure for approving the request to activate the national safeguard clause, as outlined in the regulation on the preventive arm of the new governance framework, has not yet been concluded, as we must await the Council’s formal approval: it is in this context and within the framework of this procedure that the policy content of the Dpfp must be interpreted,” added the Minister for the Economy. “The composition of the budget will therefore be finalised once the European procedure has been completed,” he emphasised, “and details will be provided in the Budget Policy Document (DPB), which the Government will shortly submit to Parliament and the European authorities.”

Wage recovery has come to a halt

‘In the second quarter of 2026, the disposable income of consumer households rose by 0.4 per cent compared with the previous quarter. The 1.7 per cent growth in consumption was thus accompanied by a reduction in the household savings rate, which fell by 1.2 percentage points during the quarter to stand at 6.7 per cent. Against the backdrop of a 1.4% increase in the implicit consumption deflator, household purchasing power fell by 0.9% quarter-on-quarter.” This was stated by Francesco Maria Chelli, President of Istat, during a hearing before the Budget Committees of the Chamber of Deputies and the Senate on the 2026 National Fiscal Plan.

The difficulties faced by families

‘The estimated average monthly expenditure of households resident in Italia stands at 2,782 euros at current prices, essentially unchanged from the 2,755 euros recorded in 2024 (+1.0 per cent). 29.4 per cent of households reported having cut back on food expenditure compared with the previous year, reducing either the quantity or the quality of the products purchased; this figure is down from 31.1 per cent in 2024. ‘Taking price trends into account, the ratio of the total equivalent expenditure of households in the bottom quintile to that of households in the top quintile stands at 5, a slight decrease from 5.1 in 2024,’ he added.

Recovery of wages on hold

‘The current rise in inflation calls for particular attention to be paid to wage trends. In the second quarter of the year, the trend of nominal wages catching up with price growth – which had continued uninterrupted from the fourth quarter of 2023 to the first quarter of 2026 – came to a halt. In particular, in the private sector, the year-on-year trend in wages for the period April–August (the latest data available for wages) remains, albeit to a limited extent, below the rate of inflation.”

‘If tensions persist, GDP could fall by 0.2 per cent in 2027 and 0.4 per cent in 2028’

‘The Institute has carried out a further simulation exercise’ in addition to those already included in the Dpfp, ‘assuming a slower decline in the prices of the main energy commodities over the two-year period 2027–2028 due to persistent supply constraints. This would result in a greater and more prolonged impact on inflation and a more decisive monetary policy response. As a result of the continuing tensions – and concerns about rising government bond yields – it is also assumed that high levels of uncertainty amongst market participants will persist over the two-year period 2027–2028. The combined effect of these factors would result in a reduction in GDP growth of 0.2 percentage points in 2027 compared with the baseline scenario. The effect would be greater in 2028, when the reduction in growth would reach 0.4 per cent due to the propagation of the transmission effects of the shocks to the economy. In 2029, even in the absence of a further intensification of the assumed shocks, the impact on GDP would remain negative, amounting to 0.2 percentage points’. This was stated by Francesco Maria Chelli, President of Istat, during a hearing before the Budget Committees of the Chamber of Deputies and the Senate on the 2026 National Fiscal Programme.