The OECD has published the Economic Survey report dedicated to Italy, which highlights numerous problems in our country’s economy. The main symptom of the unresolved issues in the Italian economy is growth, which in 2026 will be only 0.4% and will increase only to 0.6% in 2027. These are the lowest figures in Europe.
The problems are numerous and intertwined with each other. Deteriorating demography, low productivity, public debt that never stops growing, also due to pensions, and the cost of energy, which limits businesses.
Italy is not growing, the symptoms of the problems detected by the OECD
The OECD report listed a series of negative data on the Italian economy that had already emerged from the findings of Istat, Eurostat and the International Monetary Fund:
- growth for 2026 will not go beyond 0.4% and will reach 0.6% in 2027;
- public debt will exceed 137% of GDP this year;
- the deficit/GDP ratio did not fall below 3% in 2025.
Unlike the findings of the statistical institutes, however, the Economic Survey of the Organization for Economic Development has also identified the main reasons that prevent our country from growing at least in step with the European average. The focal points of the report are:
- an excess of public debt that prevents the State from investing efficiently;
- excessive spending on social security that takes resources away from growth;
- the demographic crisis, symptom and cause of economic decline;
- low productivity;
- the cost of energy.
The problem of public debt
To explain the problems of the Italian economy identified by the OECD, we can start from the reason why the various governments and the State in general cannot do much to solve them: public debt. Italy is the second European country after Greece in terms of debt-to-GDP ratio. In 2025 this figure reached 137.1%, compared to 134.7% in 2024.
Debt has a cost, interest. In 2026, 111 billion euros have been foreseen to pay the coupons of government bonds. For school education, for example, the State General Accounting Office estimates that Italy spent 56.8 billion in 2025. Furthermore, every year, Italy must repay maturing debts. In 2025 this spending item was the first ever, at 232 billion euros.
The solution to this problem, underlines the OECD, is to reduce the debt. This would mean saving tens of billions of euros every year that could be spent on industrial policies to improve growth.
The weight of pensions on the economic system
The debt is absolutely, between interest and repayments, the first expense for the State. If you look at the 2025 budget, the second item is the “financial relations with the autonomies”, around 150 billion which go to finance the Regions and therefore healthcare. Then there are pensions, 122 billion a year, more than what Italy spends on industrial policies.
This is the second problem identified by the OECD. One of the reasons Italy has accumulated its enormous public debt is social security spending. It is necessary to reduce it. Pensions are not investments, on the contrary they remove money from the production system, given that they are paid by those who work, to direct it towards sectors that do not generate value.
The demographic crisis
Italy has been particularly irresponsible with pensions, but the situation is not helped by its demographics. Our country is among those with the lowest fertility rate in Europe. The increasingly elderly population produces less and costs more and more in state assistance. This, highlights the OECD, limits Italian growth.
The demographic problem is the most difficult to solve. No country in history has ever managed to obtain the desired result with a demographic policy, whether of birth control or expansion. The number of children that each person decides to have is linked to numerous aspects:
- current economic possibilities;
- future prospects;
- family, social and state support structures.
In the short term, the most immediate solution to the demographic crisis is the increase in immigration, a tactic implemented by the Meloni government, which significantly increased the number of work permits available with the so-called “flow decrees” throughout the last legislature. The results were seen quickly. In 2025, Italy’s population remained stable for the first time in almost a decade, despite declining births and increasing deaths. This is due to the increase in immigrants, 188 thousand in just one year.
Because there is little productivity in Italy
Another problem identified by the OECD is that of productivity. More and more people work in our country, but growth remains stagnant. This means that each new worker produces less wealth than those already working. Intuitively, this problem seems linked to the behavior of workers, who work “poorly” and therefore produce little. In reality it is a problem of company behavior and system evolution.
Linked to the demographic issue, Italy increasingly needs “low productivity” sectors, such as care for the elderly. Furthermore, tourism is highly developed in our country, another sector that does not generate added value and creates poor jobs. However, there is also a problem at an industrial level. Recent data also shows this Symbola on a sector in which Italy is a leader: design. Our country produces 20% of the European turnover in the sector and employs 21.5% of workers. But our productivity is among the lowest in Europe.
One of the reasons is that, in Italy, companies invest little. Our country is twentieth in the EU for the number of companies that invest. This means that workers often have inadequate and outdated tools available to do their work. As a result they produce less than their European colleagues.
The cost of energy
Among the reasons why Italian companies invest so little is the fact that they have more expenses than their European competitors. Not only do they pay more taxes on average, a problem that is linked to that of debt, but they spend more on energy. The OECD confirmed the data already reported at the end of 2025 by Confindustria. In Italy energy costs 30% more than the European average, 278 euros per megawatt hour compared to 171 in Spain.
The solution to the problem reported by the OECD is to produce more energy. The more energy Italy produces, the less it will cost. The least expensive energy of all is that generated from renewable sources, which would also allow our country to free itself from the dependence on foreign countries that sources such as gas, oil and coal entail. This is not an untried strategy: this is exactly how Spain has reduced the cost of its energy.
