How the world economy learned to love chaos

Central banks have embarked on austere monetary policy to crush inflation. Worries about the financial system, from bond markets to commercial property to the health of the banks, are ever-present. Some 4bn people will head to the polls this year, with unpredictable consequences. Most concerning of all, the world is on fire, with conflicts from Ukraine to Israel and the Red Sea. Other wars, not least in Taiwan, do not feel all that far away. Little wonder that analysts speak of “polycrisis”, “hellscapes” and a “new world disorder”.

And yet, for the moment at least, the world economy is laughing in the face of these fears. At the start of 2023 almost all economists reckoned that a global recession was due that year. Instead, global GDP grew by about 3%. The early signs suggest progress is continuing at the same rate this year. Data from Goldman Sachs, a bank, indicate that global economic activity is about as lively as it was in 2019. A measure of weekly GDP produced by the OECD, a club of mostly rich countries, finds similar results. And a measure of global activity produced from surveys of purchasing managers (so-called PMI data) points to strongish growth across the world.