Italy

«The Economist», 17 febbraio 1940, p. 15

AGRICULTURE AND INDUSTRY. – Prolonged rains at unfortunate times damaged the maize crop and the vintage, but the wheat and hay crops were good, so that the number of cattle could be increased and meat and milk production were profitable. Wheat imports for the first seven months of the year amounted to 347,504 tons, against 177,974 tons in the corresponding months of 1938. As the home production in 1938 was 8.2 million tons, against 8.1 in 1937, the increased imports were probably made as a safeguard against an estimated big deficiency in the 1939 crop, which, however, did not materials.

The general index of industrial production, which stood at 113.0 in December, 1938 (1928=100), continued to rise in 1938, and reached 123.3 level in June (106.7 in June, 1938). All groups took part in the rise.

Luxury industries and building were badly hit by the war, but the textile industries received large orders from foreign countries, and they and the iron and steel and engineering industries are working up to the limit set by the supply of raw materials.

The excess of imports over exports was fast dwindling before the war. The reduction was due more to drastic curtailment of imports than to the moderate expansion of exports. The general impression is that the war has not reversed the trend and that several industries (textiles, engineering) are increasing their exports, with no small profit. The bulk of the traffic appears to be seaborne trade to the west.

TRANSPORT. – Railway goods traffic increased from 26,482,980 tons in the first seven months of 1938 to 27,793,271 tons in the corresponding period of 1939. Passengers decreased during the same period from 58.3 millions in 1938 to 56.9 millions in 1939. Since the outbreak of war there has probably been a further reduction in passenger and goods traffic, except for goods in transit to and from Switzerland and goods bound for France and the Balkans. Maritime transport profited most from the war. From September 6th to the end of the year Italian liners enjoyed a virtual monopoly of the transport of passengers on the Atlantic.

MONEY MARKET AND STOCK EXCHANGE. – Money was easy throughout the year. Rates for commercial paper were from 5 to 5.50 until the end of August, and after a short-lived tightening in September eased to 5 per cent, and under. Carry-over rates, which on the Bourse remained at 4 to 4.75 in the first half-year, eased in the summer months to 3 to 4 per cent, and at the end of the year oscillated between 3.50 and 4.50 for good securities. Under the influence of easy money and the good prospects for industrial profits, quotations were buoyant on the Stock Exchanges.

PUBLIC FINANCE. – Expenditure is increasing by leaps and bounds and revenue is having difficulty in keeping pace with it:

New taxation was therefore inevitable. After the 5, 10 and 7.50 per cent, compulsory loans and extraordinary capital taxes on land and real estate, and capital of joint-stock companies, private companies and individual industrialists and traders which were enacted from 1936 to 1938, the old sales tax was now transformed into a new 2 per cent, tax on gross income of every sort (from sales of goods and of services), and a new 0.5 per cent, annual tax on all capital was instituted.