How did the Great Depression affect Italy under Mussolini?

The Great Depression exacerbated existing deflationary pressures in Italy, leading the government of Benito Mussolini to increase spending on welfare and infrastructure to combat rising unemployment.12

Key impacts and responses included:

• Industrial Intervention: To prevent collapse, the state rescued major banks and industrial firms. It established the Institute for Industrial Reconstruction (IRI) to provide capital and supervision, creating a large, state-led industrial sector in areas like steel, shipping, and armaments.12
• Agricultural Policy: The government continued its "battle for wheat," keeping grain prices artificially high. While this benefited large landowners, it forced smaller farmers to sell their land during the economic downturn.12
• Labor and Social Measures: Although strikes were illegal, state-controlled trade unions secured some concessions, including a shorter workweek and increased welfare benefits.12
• Migration and Urbanization: As international emigration plummeted due to the global recession, rural Italians migrated to cities, causing rapid urban growth in centers like Rome.12

Ultimately, these interventions fostered a modern infrastructure but led to increased state control, budget deficits, and reliance on heavy industry.12