Italy

«The Economist», 18 febbraio 1939, pp. 18-19

AGRICULTURE AND INDUSTRY. – The agricultural year was reasonably satisfactory, yields being generally higher than in recent years. The wheat crop was 8,100,000 tons, against an annual average of 7,323,000 tons during the three years 1935-37. Similar comparisons for other crops run as follows:

Price were from 10 to 20 per cent, higher.

The following are the indices of industrial production published by the Corporation Department (1928=100):

The general index progressed from 105.5 in January to a maximum of 114.7 in March, falling to a minimum of 88.8 in August, rising again to 108.4 in September and to 115.9 in October.

FOREIGN TRADE. – Trade with the colonies is now separately stated.

*converted into lire at the legal rate before the realignment of October 6, 1936.

The adverse balance of trade was drastically reduced, almost exclusively by reducing imports. Reductions were possible partly through good wheat and corn harvests, partly because stocks, depleted during the African campaign, were replenished in 1937; and, finally, through better terms of trade with foreign countries. Foreign trade is now at a lower level than in 1933. The direction of trade has also changed. (See table at p. 764).

Germany is the only country which appears to be increasing her trade with Italy.

TRAFFIC. – Internal traffic is growing. The State Railways have fared as follows (from July 1st to June 30th). (See table at p. 764).

PRICES. – COST OF LIVING AND WAGES. – Changes in the level of wholesale prices and in the cost of living (1928=100) have been as follows:

Prices now appear to have come back to about the 1929 level. Devaluation was only one among many influences which helped to reverse the trend of prices. Export prices, which suffered most during the crisis, are also slower to recover ground, in comparison with 1929. The cost of living is almost back to the 1929 level; in December, 1938, the index number was 99.97. The wages index has gone from 84.3 in 1935 to 100.5 in 1937; but there are no later data. In October, 1938, the number of persons in employment was 43 per cent, higher than the 1934 figure.

MONEY MARKET AND STOCK EXCHANGE. – The year showed a featureless money market. The official rate was unchanged at 4.50 per cent.; private rates for commercial paper between 5 and 5.50; and monthly settlements were carried over at 4 to 5.75 per cent. On the Stock Exchange, share-values, which had closed in 1937 at 48.8 (1924=100) after a bottom at the end of 1935 of 35.3, rose to 50 at the end of February, 1938, and then hovered around 48, closing finally at 46-47. Saving and current account deposits increased from 74,627 million lire at the end of 1936 to 79,575 at the end of 1937 and to 82,408 millions at the end of September, 1938. The number and capitalisation of Italian joint-stock companies changed from 20,018 companies at the end of 1937 to 20,660 at the end of November, 1938, and their capital progressed from 47,695 to 52,807 million lire. The increase was mostly in paper transactions from reserve to capital account. Failures are fast diminishing:

PUBLIC FINANCE. – No figures were published regarding the accounts after the Budget speech of May 18, 1938. The total deficit (ordinary and extraordinary expenditure included) was 2,030 million lire for the fiscal year ending June 30, 1935; 12,685 millions for 1935-36; 16,230 millions for 1936-37. For 1937-38 the deficit was preliminarily estimated at 12,173 millions, but owing to a high yield from the new tax on joint-stock companies, the Minister of Finance hoped that the deficit would be kept under the 12,000 millions level. For the current fiscal year a surplus of 37 millions, and for the year 1939-40 a deficit of 4,755 millions, were originally estimated; but these figures are largely a guess, since they do not include unforeseen extraordinary expenditure. Following the two 5 and 10 per cent, extraordinary taxes on land and real estate capital and on joint-stock companies, a third extraordinary tax of 7 1/2 per cent, was applied to the capital of private companies and concerns.