Italy

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The Economist

Data di pubblicazione: 14/02/1931

Italy

«The Economist», 14 febbraio 1931, pp. 15-17

 

 

 

FOREIGN TRADE. – For the first time since 1921 foreign trade has experienced a severe slump. Imports, which, in present stabilised lire, increased from 13,868 million lire in 1921 to 21,800 in 1929, decreased to 17,351 millions in 1930. Exports, which had increased from 7,487 million lire in 1921 to 14,889 in 1929, decreased to 12,119 millions in 1930. The major part of the slump is owing to the decline in prices. From indices below it appears that between 1929 and 1930 prices of exported goods decreased 96.7 points, while those of imported goods only 67.3 points. According to another set of figures of the Industrial Confederation, however, both indices have varied at about the same rate; so that the comparative bargaining position of Italy should not have been impaired. The fact that, notwithstanding a decrease to about half the 1925 cost, the volume of imported raw materials decreased during the months July-September, 1930, to about 72 to 82 per cent, of the 1925 basis, suggests that a decrease in industrial stocks occurred. When a revival comes, the imports of raw materials should be the first to rise. The excess of imports over exports was only 5,232 million lire in 1930, as against 6,429 in 1929. How this deficit has been covered is difficult to tell. No loans were made in foreign countries, current foreign accounts in Italian banks are not said to be increasing, some Italian securities were repatriated, and the gold reserves of the Bank of Italy increased by 106.7 million lire. The one adverse items known, the decrease by 863.6 millions of the foreign exchange reserve of the Bank of Italy, does not suggest, however, a strong pressure on the liquid resources of the country towards the balancing of foreign trade payments.

 

 

CROPS. – Wheat had a poor year, while yields of corn, sugar beet, rice, potatoes, raisins, and hemp were larger or not much smaller than in the past two years. Prices were much lower; and the trend was not stemmed by increases in custom duties. The internal price of wheat at about 100 lire per quintal, and that of raw rice at 45, are the worst that have been seen in the last two generations. No wonder that the consumption of artificial fertilisers in past autumn has alarmingly decreased; so that lower prices are offered to induce agriculturists not to slacken their efforts.

 

 

INDUSTRY. – The use of electric power, which is a good index of industrial activity, has progressed, taking into account also imported power, from 8,933.7 million Kw. during the first 11 months of 1929 to 9,148.2 Kw. during the corresponding period for 1930. Possibly the increase is due more to an extension of plants than to an increase of production in old plants since; from October, 1929, to October, 1930, the installed power increased from 3,735,000 Kw. to 4,139,000 Kw. Commercial imports of coal decreased from 9,521,000 tons in 1929 (10 months) to 8,894 in 1930 (same period), and imports of reparations coal from 2,546,000 to 2,082.000 tons. Petrol and oil imports were 555,000 tons in the first nine months of 1930, as against 699,000 tons for the whole of 1929. Unemployment increased throughout the year: the lowest figure was 322,291 at the end of June, and the figure of 642,169 reached at the end of December, 1930, is the maximum of the last ten years. Traffic on the State railways is decreasing: 53 million tons of goods were loaded in 1930, as against 60.3 in 1929; 97.6 million passengers were carried in 1930 (11 months), as against 108.0 in 1929 (same period). Navigation, and the output of textiles, cement, superphosphates, rayon, paper, and minor metals have been maintained; but profits are less, or vanishing. Building permits were issued for houses aggregating 129,560 rooms in 1930 (10 months), as against 158,429 in 1929 (same period). The number of bankruptcies is still rising: the monthly average for 1930 was 1,029, against 956 in 1929, and 933 in 1928.

 

 

PRICES, WAGES, COST OF LIVING. – The usual discrepancy between wholesale prices, the index of which was 368.6 in December, 1930 (1913=100), retail prices (482.1), and cost of living (517.6) exists in Italy as elsewhere. A campaign has been organised against the high cost of living, beginning with reductions of salaries and wages and of rents. But the continued fall of wholesale prices has maintained the distance. Wages are beginning to decrease; but, as the lowest wages were exempted from the reduction agreed upon between the employers and the employees’ associations, the general average is only slightly affected. Short time and unem­ployment are reducing the yearly earnings of the workers.

 

 

SAVINGS AND NEW CAPITAL ISSUES. – Diminished incomes necessarily have reacted unfavourably on savings and investments. Saving banks deposits are almost stationary, their increases being limited to capitalisation of interest. The same may be said of the deposits of ordinary banks. Investments in joint-stock companies totalled only 2,641 million lire in 1930 (11 months), as against 4,615 in 1929 (same period). Debentures issued in the first 11 months totalled 1,028 millions in 1930, against 1,421 in 1929. As there were several failures of minor banks, and forced amalgamations of others, there was probably an increase in direct investments, especially in the country, and of the hoarding habit. Active note circulation should therefore be calculated at less than the total issues.

 

 

MONEY AND STOCKS. – Foreign exchanges were maintained, with very slight variations, near the upper gold point of 19.10 lire to the dollar. The official rate of discount, beginning the year at 7 per cent., was reduced to 6.50 per cent, on March 3, to 6 per cent, on April 24, to 5.50 per cent, on May 19. Market rates for commercial paper were lowered gradually from 6.75-7 to 5-5.50 per cent., for financial paper from 8.50 to 6.50-7.50 per cent. Prolongation rates for industiral first-rate securities went down pro­gressively from 6.50-7.25 to 5.25-.5.75 per cent. At the end of the year money was to be found in the bourses, on 3.50 per cent. Consols, even at 2.50-3 per cent., and on 5 per cent. Consols, at 4-4.25 per cent.

 

 

PUBLIC FINANCE. – The financial year 1929-30 closed with a surplus of 151 million lire. During the first six months (July 1st to December 31st) of the present financial year, accounts disclose a deficit of 951 million lire; which was the justification for a reduction of 12 per cent, of all salaries of public employees. Public internal debts increased from 87,134 million lire on June 30, 1929, to 88,102 on June 30, 1930, and to 88,781 on De­cember 31, 1930.

 

 

 

ITALY

   

1928

1929

1930

  Trade:

  Imports (million lire)

21,920.00

21,300.00

17,351.00

  Exports (million lire)

14,559.00

14,889.00

12,119.00

  Agricultural Production (in 1,000 tons):

 

  Wheat

6,221.00

7,079.00

5,738.00

  Maize

1,588.00

2,434.00

2,866.00

  Rice

631.00

673.00

651.00

  Potatoes

1,490.00

2,003.00

1,945.00

  Raisins

7,503.00

6,492.00

5,849.00

  Hemp

86.00

90.00

91.00

  Sugar beet

2,861.00

2,925.00

3,025.00

  Industrial Output (in 1,000 tons):

 

  Pig iron

507.60

678.50

534.30

  Steel

1,963.10

2,142.80

1,774.10

  Sheet iron

1,849.10

1,951.80

1,531.40

  Lead

21.30

22.70

22.70

  Spelter

10.60

15.70

15.70

  Aluminium

3.60

7.00

7.00

  Cement (monthly average)

256.40

*326.70

316.70

  Superphosphates (monthly aver.)

87.10

*118.40

129.00

  Rayon (monthly average)

2.17

*2.94

2.75

  Paper

26.90

*31.50

31.50

  Industrial Production Indices

  Building permits in 17 cities (number of rooms)

187,355.00

***129,560.00

  Electric power (hydro-electric, thermo-electric and imported) mill, kw

9,745.20

*9,148.20

  Imports of coal: commercial 1,000 tons

9,152.00

11,481.00

***8,894.00

  Imports of coal: reparations 1,000 tons

3,544.00

3,122.00

***2,082.00

  Imports of petrol, oil, &c. 1,000 tons

607.00

699.00

****555.00

  Consumption of cotton in years ending July 31
(1,000 bales)

954.00

1,038.00

1,001.00

Transport

 
State railways: commercial goods loaded(1,000 tons)

56,692

60,343

52,998

 
State railways: number of passangers carried (1,000)

112,238

116,891

97,649*

 
State railways: traffic receipts, in years ending June 30 (mill, lire)

4,478

4,666

4,606

 
Shipping tonnage entered (1,000 tons)

27,327

28,091

32,627

 
Prices, Cost of Living, Wages (basis 1913=100, when not otherwise stated):

Annual average wholesale prices:

 
Home goods

484-5

475-1

406-9

 
Imported goods

506-1

491-7

424-4

 
Exported goods

479-6

452-8

356 1

 
General index

491-4

480-7

411-0

 
Gold index of wholesale prices

133-9

130-5

111-6

 
Retail prices of 21 commodities (December aver-age)

 

563-9

554-2

482-1

 
Cost of living, Milan (January-June, 1914=100)

 

537-8

549-2

517-6

 
Wages (July, 1928-June, 1929=100) (end of December)

 

101-6

102-6

99-5

 
Unemployed (end of December) thousands…

363-5

408-7

642-2

 
Loney Market, Finance:

Note circulation, end of Dec. (mill, lire)

 

17,295-4

16,774-3

15,680-3

 
Gold reserve, end of December (mill, lire)

5,051-8

5,1901

5,296-8

 
Foreign exchange reserve, end of December (mill, lire)

 

6,018-9

5,1911

4,327-5

 
Post office savings bank deposits (mill, lire)

10,819

11,778

12,414**

 
Other savings bank deposits (mill, lire)

15,685

16,459

16,913 **

 
Net increase of share capital of joint-stock companies (mill, lire)

 

2,698

4,645

2,641*

 
Stock exchange: index of 35 leading shares (basis Dec, 1925-100)

 

88-3

81-2

66-4

 
Stock exchange: index of 14 Milan debentures (basis Dec. 1925-100)

 

101-9

99-3

102-0

 
Money Market, Finance-cont.

Total clearings (mill, lire)

 

780,508

741,143

598-92

 
Number of bankruptcies

13,346

12,906

15,789

 
State revenue (year ending June 30) (mill, lire) .

19,710

20,201

19,397

 
State expenditure (year ending June 30) (mill. lire)

 

19,222

19,646

19,746

 
Public internal debt (June 30) (mill, lire)

86,446

87,134

88,102

 
* 11 months. ** End of October. *** 10 months. **** 9 months.  

 

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