Global Economy Watch - A Summary Of Key Economic Developments (April 2013)

Key Messages:

1. The Cyprus bailout and Italian political stalemate are reminders of how fragile and fast-changing events can be in the Eurozone
2. The Chancellor's latest Budget offered modest support to the economy in 2014-15, but rising public debt levels are a concern
3. Japan has signalled a bolder, more radical monetary policy to boost growth, but this may not be appropriate for countries with higher inflation rates.

At a glance

• After a quiet start to 2013, the latest episode in the Eurozone crisis in Cyprus provided a reminder of how fast events can unfold there.
• The Cyprus bailout negotiations revived fears of a disorderly bankruptcy and Eurozone exit, because of the events leading to the bail-out (extended bank holidays), the unprecedented content of the agreed package (deposit-holders taking a hit) and the post-bailout side-effects (capital controls).