Global shocks are less frightening

The comprehensive report on global economies presented yesterday by the International Monetary Fund (IMF) is set to make headlines for a few interesting decimal points, though these are, all things considered, of little significance. The news that you’ve probably all read by now concerns the upward revisions to Italy’s GDP, with the growth forecast for 2026 rising from 0.5 per cent to 0.8 per cent and that for 2027 from 0.5 per cent to 0.6 per cent – nothing out of the ordinary. The news that should, however, be of interest to everyone is the reason why the IMF’s ‘World Economic Outlook’, despite all the troubles currently plaguing the world, contains so many forecasts that have been revised upwards.

The corrections are sometimes minor, sometimes more significant, and at other times more substantial, yet they all form part of a single, overarching narrative that we stubbornly refuse to acknowledge, even when it is right there before our eyes: the surprising ability of the world’s economies – even democratic ones – to find creative ways to weather global crises with a ease that defies all expectations. For three consecutive years—in 2023, 2024 and 2025—the International Monetary Fund underestimated global growth, which subsequently turned out to be higher than the forecasts made a year earlier. It did so despite everything we know: Trump’s protectionist trade policies, the US’s lack of support for democracies, soaring inflation, the ongoing cycle of monetary tightening, and the presence of numerous wars around the world which, in various ways, are having a significant impact on the global energy system.

Global growth in 2026 will be 3.1 per cent (an improvement of 0.1 percentage points compared with July). Growth in the Eurozone will be 1.1 per cent (an improvement of 0.2 percentage points compared with July). Growth in the United States will be 2.3 per cent in 2026 (unchanged from the April forecast) and 2.3 per cent in 2027 as well (0.2 percentage points higher than the April forecast). Small percentages, one might say, but they point in a direction that should not leave us indifferent: the world’s ability to react to global shocks – not with ease, for the wounds are there, but with a resilience that is hard to imagine. (continued on page four)

In addition to the growth figures, there is another interesting piece of data concerning the unexpected figures for trade. Despite wartime restrictions, trade tensions, protectionism, wars and tariffs, world trade is set to expand by more than GDP in 2026—by 4.6 per cent—representing a surge of 1.8 percentage points compared with forecasts made six months ago in April, when trade growth was estimated at 2.8 per cent. And all this, the IMF notes, is not due to reshoring policies or preferential trade arrangements between democratic economies and their peers, but rather to the growing ability of economies to diversify their trading partners.

Economies are growing more than expected, despite everything. Trade is increasing more than expected, despite everything. And even the effects of the prolonged blockade of the Strait of Hormuz have weighed less heavily on global GDP than would have been the case had there been no adjustments. According to a simulation contained in the report, without new shipping routes and without greater flexibility in supply, the Hormuz blockade would have reduced global growth in 2026 by around 0.9 percentage points. Thanks to the new routes and the use of stockpiles, the estimated impact fell to 0.4 points and, taking into account reduced dependence on oil, was further reduced to 0.3. This may be down to the resilience of global economies, perhaps, but it is also linked to another interesting finding that emerges from the IMF’s report: the world is less vulnerable to oil shocks because it now needs less oil than in the past to produce the same amount of wealth.

Consequently, growth in the major economies is less exposed to fluctuations in oil prices than it was a few decades ago (specifically, according to IMF simulations, in 2026 this reduced dependence reduced the impact on global growth by 0.1 percentage points). Moreover, among the reasons why the economy has grown slightly more than expected is a factor that is often described as a sign of the world’s decline: artificial intelligence, which, thanks to investment in infrastructure, semiconductors and data centres, has helped the global economy to expand more than anticipated and could lift global GDP to a level 0.6 per cent higher than the baseline scenario by 2029 should there be a further acceleration in AI-related investment and productivity. The economic collapse that had been anticipated did not materialize in the ways they had imagined.

The collapse of world trade has not materialised in any of the ways envisaged. The world’s capacity to respond to crises has increased more than the doomsday narratives would have suggested. Support for besieged democracies, such as Ukraine, has coexisted with European economies that have not entered a widespread recession and with labour markets that have continued to hold up in several countries: in the Eurozone, the IMF forecasts unemployment to remain stable at 6.3 per cent over the three-year period 2025–2027, falling in Italy from 6.1 per cent in 2025 to a projected 5.6 per cent in 2026, and in Spain from 10.5 per cent in 2025 to a projected 9.8 per cent in 2026.

The invulnerability of global democracies and their economies remains to be proven. Their ability to withstand global shocks with greater ease than predicted should make us reflect on the systematic tendency of public opinion to paint a future consisting solely of misfortune, without believing for even a moment in the ability of economies to do what they regularly demonstrate they can do: manage even the most complex problems with a spirit of adaptability, a drive for creativity, a sense of innovation and a healthy dose of confidence in the future.