The renewed conflict in Iran risks hitting one of the most fragile parts of the Italian economy once again: household spending. After a start to 2026 that had raised hopes of a more stable recovery, the latest surge in oil and gas prices could drive inflation back up to 2.9%, effectively erasing the already modest rebound in purchasing power.
The warning comes from CER for Confesercenti, which estimates that higher energy costs would almost completely wipe out growth in real disposable income, reducing it to just +0.1%, while also eliminating around €3.9 billion in expected consumer spending. It is a troubling outlook for a country where family budgets are already under intense pressure from rising fixed costs.
The broader picture is one of gradual impoverishment that has been building for years. Between 2005 and 2025, the purchasing power of Italian households fell by 3.2%, while the household savings rate nearly halved, dropping from 13.3% to 7.8% of disposable income. Over the same period, nominal household spending rose by 23%, but in real terms it actually fell by 15%, amounting to an estimated €133 billion loss, or roughly €5,000 less per family.
A major burden has been the rise in so-called non-discretionary expenses. Housing, energy, transport, insurance, healthcare and financial services now account for 42% of the average household budget, or around €14,300 a year. That leaves families with less room for optional spending and makes them more vulnerable to any new external shock.
Italy’s paradox is that while employment has grown - with around 1.4 million more people in work over the last two decades - this has not translated into higher living standards. Italians are working more, but in real terms many are earning less. Average labour income per worker has fallen by 9.3%, with the sharpest drop recorded among the self-employed.
At the heart of the problem remains Italy’s long-standing productivity weakness, still too limited to support wages, investment and competitiveness. For Confesercenti, the danger is that this latest energy shock could halt the recovery just as the country was beginning to regain some economic ground. The underlying equation remains painfully familiar: more expensive energy, poorer households, and a more vulnerable economy.