The last four years have brought three huge shocks: Covid; post-Covid supply disruption; and Russia’s invasion of Ukraine and the subsequent surges in commodity prices. Is this series of vast shocks now over? The deadly assault on Israel and conflict in Gaza suggests that the answer may be “no”. Recent turmoil in bond markets is another mark of persistent lack of predictability.

Thus, the carefully prepared analysis of the IMF’s latest World Economic Outlook may already be a bit out of date. Nevertheless, it is, as always, very helpful. What it tells us is both encouraging and disturbing. The world economy has proved resilient, but performance has deteriorated in the longer term, combined with a divergence in the performance of rich and poorer countries relative to expectations. (See charts.)

Start then with resilience. Here are three encouraging developments: the IMF has had no need to make any significant changes to its April forecasts; the financial turbulence of last spring — with the collapse of US regional banks and Credit Suisse — has abated; and, most important, there is growing evidence that inflation may be reduced to target without recessions. Thus, disinflation may prove more “immaculate” than I had expected. The WEO notes that labour markets remain strong in many high-income countries, without evidence of “wage-price spirals”. There is also evidence of “wage compression”, with lower wages rising relative to higher ones. The WEO suggests this might be due to the amenity value of flexible and remote working for skilled workers: the latter are prepared to work at home for lower pay.