What problems and issues did Italy face before the start of World War II?
To the extent that Italy faced problems before World War II, they were problems of its own making. Put simply, Italy was not satisfied with its place in the world and how the Treaty of Versailles had treated it.
Italy had been on the winning side in WWI, though it was not very heavily involved in the war. It had hoped to get a great deal of territory but the other allies refused to give it what it wanted. This led many Italians, particularly war veterans, to be very angry. Italy was a relatively poor country and its economy was disrupted by the war. This led to labor strife, which spilled over into politics as well. The political upheaval led to the rise of the fascists. They wanted to suppress socialism and they wanted Italy to be accorded the respect they felt it deserved. They came to power and Mussolini became the dictator of Italy.
After that, Italy did not suffer from very many problems. They were still not an economic power house and many people were unhappy about the economic situation. But this did not lead to great social upheaval. Instead, Italy’s main issues came from the fact that it was trying to win an empire in Africa so as to get the respect it deserved. These actions made the French and English somewhat concerned and led to Italy’s main problem, its lack of political allies in Europe.