Foreword 3

Basic statistics of Italy, 2025 8

Executive summary 9

1 Maintaining the reform momentum and strengthening the public finances 21

1.1. Growth has been resilient, supported by fiscal stimulus 22

1.2. Putting the debt ratio on a more prudent path will require sustained fiscal consolidation and stronger growth 37

References 64

2 Engaging youth in the labour market amid population ageing 67

2.1. Amid an ageing population, young people are an underused resource 68

2.2. Improving education and the transition into work 69

2.3. Improving labour market conditions for young people in Italy 78

References 86

3 Securing sustainable energy and competitive electricity supplies 89

3.1. More secure, sustainable and competitive energy supply is needed to support growth and address climate change goals 90

3.2. Developing renewables' role in electricity supply 94

3.3. Ensuring stable energy supply at low prices 102

3.4. Ensuring a diverse, efficient and reliable energy supply mix 104

References 109

4 Enhancing business dynamism to raise productivity 111

4.1. Productivity growth has been weak 112

4.2. Barriers to firm growth, investment and innovation weigh on productivity 113

4.3. Revitalising competition and reducing the compliance and regulatory burden on businesses 117

4.4. Improving access to finance 124

4.5. Bolstering innovation and investment in research and development 133

4.6. Strengthening managerial quality and workforce skills 140

References 148