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Recent Performance of the Economy
Italy's closest trade ties are with the other
European Common Market countries which in
The gross national product (GNP) grew 5.3 per-
1967 represented 37 percent of Italy's total trade.
cent in 1954-58 and 6.7 percent in 1959-63, a rate
The United States is Italy's second largest
exceeded only by Japan and West Germany among
trading partner (after West Germany), represent-
the industrial nations of the free world. High and
ing approximately 11 percent in 1967. Only about
expanding levels of investment, particularly in
6 percent of Italy's total trade is with Com-
industrial equipment and in construction, sparked
munist countries; trade with Cuba and Com-
the high growth rate of the latter period.
munist Asia is negligible.
Italy's large pool of unemployed workers provided
Official international reserves reached a rec-
large quantities of low-cost labor, while the newly
ord high of approximately $6 billion in August
discovered natural gas reserves offered low-cost
1966. At the end of 1968 they stood at $5.6 bil-
fuel to industry. By 1964 the threat of inflation
lion. Approximately $2.4 billion in reserves is
and sharply increasing imports obliged the Gov-
held in the form of gold.
ernment to undertake an economic stabilization
program. As a result, domestic demand fell in
real terms in 1964 and the external accounts
Labor
reverted to surplus late that year. By May 1965
the industrial production index had recovered to
Of the labor force of almost 20 million people,
the 1963 level, and the trend in recovery has been
about 40 percent are in industry and 36 percent
steady ever since. With the exception of construc-
in services or other activities, while only 24
tion and isolated industrial subsectors (for ex-
percent are engaged in agriculture. These figures
ample, certain capital goods), the economy has
reflect a major shift to industry from agricul-
now recovered from the recession and is in a
ture, which occupied about half of the labor force
new period of growth.
before the war.
Stimulated by the recovery all components of
Unemployment, formerly one of Italy's prin-
demand expanded in 1967. Private consumption
cipal problems, has virtually disappeared. Skilled
increased by 6.8 percent, investment by 11.0
labor is short in many categories, although con-
percent, and exports by 8.3 percent. The con-
cealed unemployment, inefficient use of man-
sumer price index was 116.0 percent for 1967
power, and underemployment continue to exist,
(1963=100). In monetary terms the economy grew
particularly in the south.
by 9.0 in 1967 and the GNP reached $67.0 bil-
About a quarter of the labor force is
lion. (The real GNP rate of growth in 1967 was
unionized. The Communist-dominated CGIL con-
5.6 percent.)
trols 48 percent of organized labor, the Chris-
The per capita GNP in 1967 was $1.280,
tian Democratic-oriented CISL 40 percent, and the
compared with an estimated per capita GNP of
Social Democratic-oriented UIL about 5 percent.
roughly $1,605 for the European members of the
OECD. (The per capita GNP in the United States
in 1967 was $3,966.)
FOREIGN RELATIONS
Foreign Trade and International Reserves
Italy has achieved its basic postwar objective
of equality and partnership in the community of
One of the major factors in Italy's economic
democratic nations. It was admitted to the United
growth in recent years has been the sharply in-
Nations in 1955, after earlier applications had
creasing volume of its foreign trade. Italian ex-
been vetoed by the U.S.S.R. It is a member and
ports have increased both in volume and items,
strong supporter of NATO, the Organization for
and in 1967 amounted to over 13 percent of Italy's
Economic Cooperation and Development, GATT,
GNP. Exports continued strong in 1968. Italy tra-
and the various organizations of the European
ditionally imports more than she exports. De-
Community (the Western European Union, the Coal
ficient in certain foodstuffs and in most raw ma-
and Steel Community, the Council of Europe,
terials, it has been forced to increase its imports
EURATOM, and the EEC). Italy favors an out-
of these commodities as demand has expanded in
ward-looking EEC with British membership. Its
step with rising living standards, changing con-
only major problem with a neighbor is the South
sumption patterns (e.g., increasing meat con-
Tyrol dispute with Austria, and the two countries
sumption), and rising industrial production. This
are conducting bilateral negotiations aimed at a
trade deficit in foodstuffs and raw materials
compromise solution. Italy has recently an-
normally is more than offset by large receipts
nounced its intention to recognize Communist
from invisibles (tourism, emigrant remittances,
China.
transportation, etc.).
On a worldwide basis, Italy's largest import
items, by value, are crude oil, corn, meats,
U.S. POLICY
wool, cotton, coal, scrap iron, and steel. Its
principal exports are automobiles; machinery;
The United States enjoys warm and friendly
typewriters; fresh fruits and vegetables; and
relations with Italy. The two nations are NATO
woolen textiles, shoes, and other consumer goods.
allies and they cooperate in the United Nations,
6
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"ocrText": "Recent Performance of the Economy\nItaly's closest trade ties are with the other\nEuropean Common Market countries which in\nThe gross national product (GNP) grew 5.3 per-\n1967 represented 37 percent of Italy's total trade.\ncent in 1954-58 and 6.7 percent in 1959-63, a rate\nThe United States is Italy's second largest\nexceeded only by Japan and West Germany among\ntrading partner (after West Germany), represent-\nthe industrial nations of the free world. High and\ning approximately 11 percent in 1967. Only about\nexpanding levels of investment, particularly in\n6 percent of Italy's total trade is with Com-\nindustrial equipment and in construction, sparked\nmunist countries; trade with Cuba and Com-\nthe high growth rate of the latter period.\nmunist Asia is negligible.\nItaly's large pool of unemployed workers provided\nOfficial international reserves reached a rec-\nlarge quantities of low-cost labor, while the newly\nord high of approximately $6 billion in August\ndiscovered natural gas reserves offered low-cost\n1966. At the end of 1968 they stood at $5.6 bil-\nfuel to industry. By 1964 the threat of inflation\nlion. Approximately $2.4 billion in reserves is\nand sharply increasing imports obliged the Gov-\nheld in the form of gold.\nernment to undertake an economic stabilization\nprogram. As a result, domestic demand fell in\nreal terms in 1964 and the external accounts\nLabor\nreverted to surplus late that year. By May 1965\nthe industrial production index had recovered to\nOf the labor force of almost 20 million people,\nthe 1963 level, and the trend in recovery has been\nabout 40 percent are in industry and 36 percent\nsteady ever since. With the exception of construc-\nin services or other activities, while only 24\ntion and isolated industrial subsectors (for ex-\npercent are engaged in agriculture. These figures\nample, certain capital goods), the economy has\nreflect a major shift to industry from agricul-\nnow recovered from the recession and is in a\nture, which occupied about half of the labor force\nnew period of growth.\nbefore the war.\nStimulated by the recovery all components of\nUnemployment, formerly one of Italy's prin-\ndemand expanded in 1967. Private consumption\ncipal problems, has virtually disappeared. Skilled\nincreased by 6.8 percent, investment by 11.0\nlabor is short in many categories, although con-\npercent, and exports by 8.3 percent. The con-\ncealed unemployment, inefficient use of man-\nsumer price index was 116.0 percent for 1967\npower, and underemployment continue to exist,\n(1963=100). In monetary terms the economy grew\nparticularly in the south.\nby 9.0 in 1967 and the GNP reached $67.0 bil-\nAbout a quarter of the labor force is\nlion. (The real GNP rate of growth in 1967 was\nunionized. The Communist-dominated CGIL con-\n5.6 percent.)\ntrols 48 percent of organized labor, the Chris-\nThe per capita GNP in 1967 was $1.280,\ntian Democratic-oriented CISL 40 percent, and the\ncompared with an estimated per capita GNP of\nSocial Democratic-oriented UIL about 5 percent.\nroughly $1,605 for the European members of the\nOECD. (The per capita GNP in the United States\nin 1967 was $3,966.)\nFOREIGN RELATIONS\nForeign Trade and International Reserves\nItaly has achieved its basic postwar objective\nof equality and partnership in the community of\nOne of the major factors in Italy's economic\ndemocratic nations. It was admitted to the United\ngrowth in recent years has been the sharply in-\nNations in 1955, after earlier applications had\ncreasing volume of its foreign trade. Italian ex-\nbeen vetoed by the U.S.S.R. It is a member and\nports have increased both in volume and items,\nstrong supporter of NATO, the Organization for\nand in 1967 amounted to over 13 percent of Italy's\nEconomic Cooperation and Development, GATT,\nGNP. Exports continued strong in 1968. Italy tra-\nand the various organizations of the European\nditionally imports more than she exports. De-\nCommunity (the Western European Union, the Coal\nficient in certain foodstuffs and in most raw ma-\nand Steel Community, the Council of Europe,\nterials, it has been forced to increase its imports\nEURATOM, and the EEC). Italy favors an out-\nof these commodities as demand has expanded in\nward-looking EEC with British membership. Its\nstep with rising living standards, changing con-\nonly major problem with a neighbor is the South\nsumption patterns (e.g., increasing meat con-\nTyrol dispute with Austria, and the two countries\nsumption), and rising industrial production. This\nare conducting bilateral negotiations aimed at a\ntrade deficit in foodstuffs and raw materials\ncompromise solution. Italy has recently an-\nnormally is more than offset by large receipts\nnounced its intention to recognize Communist\nfrom invisibles (tourism, emigrant remittances,\nChina.\ntransportation, etc.).\nOn a worldwide basis, Italy's largest import\nitems, by value, are crude oil, corn, meats,\nU.S. POLICY\nwool, cotton, coal, scrap iron, and steel. Its\nprincipal exports are automobiles; machinery;\nThe United States enjoys warm and friendly\ntypewriters; fresh fruits and vegetables; and\nrelations with Italy. The two nations are NATO\nwoolen textiles, shoes, and other consumer goods.\nallies and they cooperate in the United Nations,\n6"
}