The last year and a half should have been disastrous for the global economy. Russia’s invasion of Ukraine upended supply chains and sent energy prices soaring. Chinese authorities forced hundreds of millions into lockdown. High and persistent inflation forced central banks to raise interest rates at a pace unequalled since the 1980s. Housing markets tumbled. Bank failures triggered unease at the very core of the financial system. Political brinkmanship brought the US to the edge of default.

Yet, over and over, worst-case fears in markets and boardrooms have gone unrealized. European economies retooled at lightning speed and a warm winter helped bring energy prices back to earth. China lifted pandemic restrictions without suffering mass casualties. Solid balance sheets, a wave of post-pandemic refinancing activity, and immigration flows helped insulate homeowners against brutal rate increases. Swift regulatory intervention prevented a systemic meltdown in the banking system. And lawmakers managed to strike a last-minute debt ceiling deal without forcing the government to delay its payments.

Unemployment is near historic lows in most developed economies, consumers are still spending, businesses are investing, and asset prices are nearing post-pandemic highs. Forecasters have steadily revised 2023 growth estimates up since the beginning of the year.

Bloomberg consensus growth forecasts for 2023, %, median