OECD: Real wages set to fall by 0.9 per cent in Italy in 2026 due to soaring inflation
The international organisation forecasts that real wages in our country will rise by just 0.2 per cent in 2027, remaining 6.1 per cent lower than in the first quarter of 2021: this is the widest gap among the major economies in the OECD
Key points
The latest surge in energy prices has pushed up inflation, having a negative impact on real wages: in Italia, they are forecast to fall by 0.9% in 2026 and rise by just 0.2% in 2027, given the limited renewals of collective agreements expected next year and the ongoing slowdown in the labour market.
In the first quarter of 2026, Italian workers’ real wages rose by 1.3 per cent compared with 2025
The forecasts are set out in the OECD’s Employment Outlook, which estimates inflation for Italy at 3 per cent in 2026 and 2.2 per cent in 2027, with nominal wages rising by around 2.2 per cent and 2.4 per cent respectively. In the first quarter of 2026, the real wages of Italian workers rose by 1.3% compared with the previous year, benefiting mainly from the low rate of inflation. It is worth noting that, over the same period, average growth across the OECD was higher, at 1.7%.
Furthermore, real wages here are still 6.1 per cent lower than in the first quarter of 2021, a figure that represents the widest gap among the major economies in the OECD.
“Inflation in Italy is at similar levels to other countries,” explains Andrea Garnero, an OECD economist, “but the point is that nominal wages here are lower, so as soon as the tide of inflation rises, wages end up underwater. Furthermore, despite the improvement resulting from collective agreement renewals, real wages still remain below 2021 levels; the gap, which stood at 7–8 points, has narrowed but is still the highest among OECD countries and roughly corresponds to 20 days’ unpaid work compared with 2021, in terms of purchasing power.”
Unemployment rate at an all-time low
Another significant figure is that, in Italia, the unemployment rate stood at 5 per cent in May 2026, which represents an all-time low, in line with the OECD average (4.9 per cent). Here, the unemployment rate has fallen by 1.5 percentage points over the past year, bucking the general trend observed across the OECD, where unemployment has risen in around two-thirds of its member countries. Italia is part of a small group of southern European countries – alongside Greece, Portugal and Spain – where unemployment has continued to fall.
