In March, the annual rate of inflation reached 3.3 percent, while wages from a year earlier rose 1.2 percent, ANSA reported.
Spending power dropped 2.1 percent compared with a year earlier, the steepest decline since August 1995, the government's statistical office ISTAT said.
Bond yields rose in Rome. Government costs on two-year notes rose from 2.353 percent to 3.355 percent.
"We need to find a way to reduce the tax burden on workers and businesses," Bank of Italy Deputy Director General Salvatore Rossi said at a House hearing Tuesday.
Meanwhile, the International Monetary Fund predicts Italy will drop into a recession with the annual rate of economic growth at minus 0.3 percent for the year.