Italy's GDP is set to rise by only 0.5% this year with the energy-price shock triggered by the Iran war weighing on household consumption, investment and exports, the OECD said in its latest economic outlook report on Wednesday.
    It added that an upswing in inflation caused by the surge in energy prices will reverse recent gains in real wages.
    The Paris-based organization said Italy was exposed to the conflict in the Middle East because of a high share of its energy comes from imported fossil fuels and due to the importance of exported manufacturing production.
    It forecast retreating energy prices and reduced uncertainty will lift growth to 0.6% next year.
    "Pursuing fiscal consolidation while pursuing a comprehensive programme of structural reforms to raise productivity and employment will help to start reducing the debt burden and improve the economy's resilience to external shocks," it said.
    "Ensuring energy price support measures are temporary and targeted towards vulnerable households and firms will limit the harm from the shock while containing fiscal costs.
    "Pursuing planning and approval reforms to hasten investments in renewable energy generation and transmission can reduce energy costs and vulnerability to elevated fossil fuel prices".

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