Italy

«The Economist», 15 febbraio 1930, pp. 15-16

FOREIGN TRADE. – The corrected figures of the Central Institute of Statistics for 1929 and previous years were as follows (precious metals and reparation deliveries excluded):

The decrease in the import balance in 1929 is wholly attributable to the second half of the year. In the first half the excess of imports increased from 4,750 to 4,897 million lire. The heavy imports were due to coal, gasoline, corn and broken iron and steel. In the second half of the year, however, owing to lesser imports of wheat (354,0000, against 946,000 tons), and of corn (244,00, against 466,000 tons), imports were lower at 8,801 million lire, against 9,251 million lire in 1928; and as the exports were unchanged (6,512, against 6,489 million lire), the excess of imports went down from 2,763 to 1,570 million lire. The hoped-for increase of exports has failed to materialise during the past year, as rationalisation and reduction of costs in industry have not yet produced sufficient result, though in agriculture the wheat campaign has met with better success.

The improvement in the balance of trade becomes almost negligible when expressed in terms of lire of pre-war purchasing power. To the deficit we must add the deliveries on reparation accounts, which are true paid imports, as Italy has to pay over to Great Britain and United States practically the whole amount received by Germany. The most important item in this account is coal, of which we imported 1,727,861 tons in 1925, 2,891,381 tons in 1926, 3,088,906 tons in 1927, 3,539,231 tons in 1928 and 1,927,000 tons in the first eight months of 1929.

CROPS. – Agricultural yields generally were better in 1929 than in 1928. Comparative figures for several years are given in the following table.

INDUSTRY. – The production of electric power increased from 6,784.7 million kilowatts in the first ten months of 1928 to 7,317.8 in the corresponding months of 1928. In general, 1929 was not a good year; the effects of the revaluation of the lira were still felt. Goods carried by State railways, which were 63.2 million tons in 1924-25, increased to 65.3 million in 1925-26, but were only 64.5 in 1928-29. The number of passengers carried by State railways fell from 115.7 million passengers in 1927 to 112.2 in 1928, and to 99.2 in the first ten months of 1929, the probable yearly total being but slightly higher than in 1927. The process of liquidation of unsound firms is continuing; failures averaged 944 monthly in the first 11 months of the year, against 933 in 1928, 886 in 1927, 654 in 1926 and 617 in 1913. Transactions passing through the 11 clearing houses fell from 710.1 milliard lire in the first eleven months of 1928 to 678.4 in the corresponding months of 1929, and the decrease was especially felt in end-of-the-month Stock Exchange clearings. The highest level of unemployment was 489,437 in February, as compared with 439,211 in January, 1928; the minimum was 193,325 in June, as compared with 234,210 in July, 1928. In December, 1929, there were 408.748 persons wholly unemployed, as compared with 363,551 in the corresponding month of 1928. From December, 1928, to December, 1929, the greatest relative increases took place in the iron and steel and other metal, textile and chemical industries.

GENERAL ECONOMIC INDEXES. – The following half-year average indices, taken from Mortara’s Prospective Economiche for 1930 are useful for an estimate of the present economic trend. (See table at p. 493).

These indices show very clearly that something is still out of joint in the economic mechanism. Gold wholesale prices at 134 and 127 for the two half-years, and 131 for the whole year, seem low in comparison with a 139 level for the United States, 137 for Great Britain, and 140 for France. Cost of living has increased, while wholesale prices decreased; and as money wages were diminishing, real wages have suffered during 1929.

Savings and New Issues. – Deposits in postal saving banks, which, after having risen to 504.4 at the end of 1926 (from the 100 basis of 1913) had sunk to 460 in October, 1927, continued in 1929 to recover the lost ground, reaching 535 in October. Deposits in ordinary saving banks similarly advanced from 475 in June, 1927, to 583.8 in December, 1928, and 591.4 in October, 1929. Deposits in the six largest ordinary banks rose from 542.3 in March, 1927, to 650.8 in December, 1928, and 664.1 in October; but those of people’s banks, which had risen from 654.8 in March, 1927, to 696.4 in December, 1928, decreased to 678.3 in June, 1929. The total of remittances from Italian emigrants decreased from 3,757.9 million lire at the end of 1926 to 3,241.5 at the end of 1927, to 2.963.7 at the end of 1928 and 2,731.6 at the end of October, 1929. The net increase in the issued capital of joint-stock companies amounted to 4.605.3 million lire in the first eleven months of 1929, compared with 2,698.1 million in 1928 (whole year) and 1,840.5 in 1927.

MONEY AND STOCKS. – The official rate of discount, which was raised from 5.60 to 6 per cent, at January 7, 1929, was again raised to 7 per cent, on March 14th and remained there during the rest of the year. The market rate of discount for first-rate bills, therefore, increased also from 5.75-6 to 6.75-7 per cent., and prolongation rates from 6.50-6.75 per cent, to 7.25-7.50 per cent. The Bourse was stagnant: the Bachi index number increased at first from 141.3 at the end of 1928 to 143.5 at the end of February, and then fall progressively to 129.2 at the end of November.

PUBLIC FINANCE. – The financial year closed for the fifth time with a surplus. The provisional figure of 382 million lire will probably increase to over 500 million lire in the final accounts. The first six months (July-December) of the current year 1929-30 show a deficit of 218.3 milion lire, owing mainly to a decrease in the yield of the wheat duty, in consequence of the good 1929 crops and the resulting diminution in imports. State internal debt increased further to 87,689 million lire at December 31, 1929.