OECD review of the Italian Parliamentary Budget Office

1. Introduction to the Italian UPB

The establishment of the UPB in 2014 marked a key moment in Italy’s commitment to fiscal responsibility. Born from a 2012 constitutional amendment and enacted in 2013, the UPB was created to fulfil the requirement for a structural balanced budget. As an IFI, its primary role is to ensure the transparency of public finances and provide the non-partisan analysis necessary to support effective parliamentary oversight.

This Review comes in the context of the Italian economy facing persistent structural challenges. Following the pandemic, the economy showed surprising adaptability, with growth supporting employment and allowing for some fiscal consolidation. However, the fiscal outlook remains a central concern. Italy’s public debt is amongst the highest in the OECD (Figure 1) and is projected to exceed 137% of GDP on the Maastricht criterion in 2027. While the deficit is narrowing – projected to decline to 2.9% of GDP in 2025 and further to 2.6% by 2027 – it is exposed to risks, including from volatile financial markets.

Figure 1. Italy’s debt ratio is one of the highest in the OECD and is rising

% GDP, general government gross financial liabilities

Source: OECD Economic Outlook 118.

The path to debt sustainability remains narrow, and challenges abound. The government has committed to a medium-term structural-fiscal strategy aimed at achieving a primary surplus of more than 1% of GDP by 2027 (estimated to have been 0.7% in 2025). Maintaining this will require steadfast discipline, particularly in containing current spending. Significant and compelling spending pressures are mounting. Reforms will need to go further than simply balancing the books if debt sustainability is to be improved. They will need to enhance Italy's long-term growth potential.

Against this backdrop, the UPB’s oversight is more critical than ever. This first external Review of the UPB, ten years after its establishment, is an opportunity to evaluate its effectiveness in delivering on its mandate and how it can strengthen its support of Italy’s long-term fiscal health.