Italy

«The Economist», 17 febbraio 1923, pp. 326-327

FOREIGN TRADE. – For the first eight months of 1922 Italy’s imports were valued at 9,928.5 million lire and exports at 5,572.4 million lire, leaving an import excess of 4,356.1 million lire. This balance was smaller than that for the corresponding period of 1921, which was 5,292 million lire. Of the imports last year wheat accounted for about one-third.

CROPS. – Generally speaking, crops were not so large as in 1921, Northern Italy in particular suffering from drought. Wheat production was 43.7 million quintals against 52.5 million quintals in 1921, corn 18.0 million quintals against 23.5 million quintals, but grapes, with 53 million quintals against 50 million quintals, were better than in 1921.

INDUSTRY AND EMPLOYMENT. – Industrial production was not interrupted by strikes. The silk industry, favoured by a good crop of cocoons (311,000 quintals against 309,000 quintals in 1921), had a good season, except for the last two months, when the foreign markets were bad. Cotton and wool had a good year. Idle spindles were estimated at 10-12 per cent, in the first half-year, and decreased to 6 per cent, in the autumn. Sugar produced was 2,600,000 quintals against 2,030,000 quintals in 1921. Very good profits were reaped by the milling industry. Sulphur, iron and steel, chemicals, and shipbuilding had a bad year, owing to American competition in sulphur, low freights for ships, and the cessation of war demands for iron, steel, and chemicals. Unemployment has been declining during the past year. The official figure of the total number of unemployed was 541,775 in January and 354,238 in December. The number of strikes was the lowest since 1900. The labour market was not eased to an appreciable extent by emigration. Transoceanic emigrants were 31,291 in the first half-year against 122,390 in the corresponding period of 1921. Emigrants to European countries were 61,293 against 28,424 in 1921. Wages have been lowered.

PRICES. – Prices were lower than in 1921. Bachi’s Index Number shows an almost continuous decrease up to May, 1922, when the total was 83.8 per cent, of the average for 1921. At this point reaction set in, and in October the maximum level of 96.2 was reached. The decline in foreign exchanges following the formation of the Fascist Government exercised a favourable influence on prices, which closed at 92.8. Textiles, minerals, metals, and chemicals were below the average, while food and meat went down.

EXCHANGES. – The average price of the dollar started at 23 lire in January, decreased to 18.7 lire in April, increasing afterwards in October to 24 lire, owing to the combined influence of the autumnal pressure and political unrest. With the usual easing of foreign purchases and the better political outlook dollars went down afterwards to 19.9 lire. The curve was not differently shaped in the case of London and Swiss exchanges; but Paris cheque was naturally influenced by the vagaries of the franc. Starting from the maximum of 187.1 lire for 100 francs in January, the exchanges oscillated between 180.2 lire and 172.5 lire till October. In November the quotation fell abruptly to 151 lire, and in December to 143.7 lire. To-day, owing to Ruhr affair, the franc is even lower.

MONEY AND STOCKS. – The official Bank rate was reduced on July 11th from 6 to 5V2 per cent. The volume of payments passing was less than in preceding years. The clearings at the Italian clearing-houses, which in 1921 had a maximum of 63,672 million lire in January and a minimum of 49,639 million lire in July, had in 1922 a maximum of 69,978 million lire in November and a minimum of 40,820 million lire in September. The paper circulation was 21,476 million lire at December 31, 1921, and was gradually reduced during 1922 till at November 10th it amounted to 20,479 million lire.

The improvement in stock exchange quotations is an index of increased hopes in the future of the country. The 3V2 per cent. Rentes remained stationary between 71.93 and 71.65 in the first ten months of the year, but rose suddenly to 77.58 in November and 77.96 in December. In the variable dividend bearing securities market the tide was also rising. Taking as a basis (100) the average of prices for December, 1921, the index number of 135 leading securities (with an issued capital of 6,893 million lire) was 96.61 in January, decreased to 88.43 in April, rose to 103.01 in August, to 11.94 in November and 112.91 in December. Prices are, however, as yet at a lower level than in December, 1918. Taking that level as 100, the index was 63.84 in December, 1921, and 72.08 in December, 1922.

PUBLIC FINANCE. – Public finance is slowly improving. The figures for the three last budgets are as follows:

Public internal debt, which was 88,423 million paper lire at October 31, 1921, rose to 92,997 million paper lire at October 31, 1922, and was probably about 95,000 million paper lire at end of the year. External debt (to Great Britain and United States) at October 31, 1922, was 21,811 million gold lire. The decrease in the budget deficit, which has been rapid in the last three years, is bound to continue, though perhaps somewhat more slowly. The last billion of deficit will be the hardest to cancel.