Italy

«The Economist», 18 febbraio 1933, pp. 15-16

FOREIGN TRADE. – The slump in foreign trade continued in 1932; imports fell to 38.7 per cent, of the 1929 figure and exports to 45.6 per cent. According to the indices of the General Confederation of Industry (1925=100), the quantity of imports was reduced to 83.7 in the first eight months of 1932 and of exports to 84.3, while prices went down respectively to 39.1 and 43.4. The deficit in the commercial balance is reduced to 1,451 million lire; this is slighdy higher than in 1931, but, although the balance of payments is increased by interest on debts, it appears to be amply compensated by the expenditure of foreign travellers and by other invisible exports.

CROPS. – Weather was exceptionally favourable to agriculture, which registered bumper record crops. A rigid system of protective duties and of quotas for millers kept the wheat prices above the 1,000 lire per ton level; premiums on exports and a compulsory consortium likewise maintained rice at the remunerative level of 550-600 lire. In other fields those devices were not available; and therefore agriculturists had a varied experience according as they raised cereals, rice and other protected products, or cattle, wine, cocoons, fruit and other exportable goods. The great mass of small and medium-sized agriculturists, who have little need to sell, fared well in this abundant year.

INDUSTRY. – Almost all industries underwent a decrease of production. Taking into account the ending of reparation imports, the decrease in the consumption of coal may be estimated at about 2,300,000 tons against 1931 and at 5,800,000 tons against 1929. The increase in the electric power produced in 1932 over 1931 is negligible, and was only 4 per cent, over 1929. Building permits, perhaps the most sensitive index of industrial prospects, are diminishing at a slower pace than in past years, only because they appear to have reached the lowest possible level.

MONEY MARKET, CAPITAL ISSUES. – The note circulation again decreased; but the need of financing a big sum of frozen banking assets prevented it from falling to the level appropriate to the much-reduced volume of business. Clearings and share turnover have fallen much more than the note circulation. There has, again this year, been a mysterious reduction of the foreign exchange reserve, not counterbalanced by the increase of the gold reserve, in the face of a favourable balance of international payments. A small continuous rivulet of capital export may be taking place. Public issues by joint-stock companies are negative, losses of capital exceeding new issues.

PUBLIC FINANCE. – The fiscal year ending June 30, 1932, closed with a deficit of 4,274 million lire, against a deficit of 504 millions in 1930-31. In the second half of 1932 the deficit was 2,041 million lire, against 1,669 in the corresponding period of 1931. The deficits are the effect of a decrease in the revenue (from 20,387 to 19,033 million lire between the two last complete fiscal years and from 8,895 to 8,818 million lire between the six months of 1931 and the corresponding period of 1932) and of increases in the expenditure (from 20,891 to 23,308 and from 10,564 to 10,859 respectively). In Italy deficits are partly prospective – that is to say, they take account of expenses which are yet to be made. The cash outgoings exceed incomings by only 408 million lire in the fiscal year 1930-31 and by 3,011 millions in 1931-32; and the excess was only 40 millions in the second semester of 1932. This means that in many cases effective expenditure already decided upon and inscribed in the budget has been postponed.