The IMF’s latest World Economic Outlook has forced it to admit that things have changed since its previous update in January when it blissfully hoped things would be OK. Now there is mostly darkness and despair.

The IMF’s January report was titled “Steady amid Divergent Forces”; whereas the latest outlook is headlined “Global Economy in the Shadow of War” and begins “the global outlook has abruptly darkened following the outbreak of war in the Middle East on February 28, 2026.”

Far be it for me to gloat, but my suggestion in January that “steady” was not a word to describe the global economy unless you were desperately trying to make the madness of Donald Trump seem normal has aged quite well.

If the graph does not display click here

As ever, the IMF remains unwilling to name Donald Trump. While it is more than happy to note the “lingering effects of the persistent rise in energy prices since Russia’s invasion of Ukraine”, the IMF only talks about “the Middle East conflict” as though it sprang out of nowhere.

And as ever, the IMF refuses to acknowledge the changed reality of the world.

It remains stuck in a situation where the biggest concern about inflation is wages.

It notes sensibly that “the standard policy response to a surge in energy prices is for central banks to look through” – ie not raise interest rates because interest rates do not affect world oil and gas prices.

However, it quickly........

© The Guardian