A year ago the International Monetary Fund predicted the global economy would grow at an average annual rate of 3.65 per cent between 2017 and 2021. This October it raised that forecast fractionally to 3.7 per cent. Almost no change in the most authoritative global economic forecast has, however, coincided with a sea change in optimism.

Lamenting a “mediocre” world outlook in late 2016, Christine Lagarde, head of the IMF, now talks of a period when countries must not “let a good recovery go to waste”.

The change in mood is understand-able. For the first year since 2010, all the leading economies are expected to ex-pand in 2017, with none in recession. This is a feat achieved for only a few years in the mid-2000s, 1997 and 1987.

Many leading economies have also performed better than expected, particularly the eurozone, China and Japan. With confidence sky high, Paul Sheard, chief economist at S&P Global, the rating agency, says US president Donald Trump “has un-leashed animal spirits”. Mr Trump has also promised to supply the US with “rocket fuel” on an already decent growth rate by means of tax cuts and Jay Powell, the new Federal Reserve chairman, is highly unlikely to take away the punch bowl soon.

However, the reality behind the up-beat new mood in the global economy is more complicated. Central bankers have certainly played a large part by continuing to find ways over the past decade to stimulate their economies against the headwinds of the global financial crisis.

The European Central Bank, in particular, is now fairly certain that its efforts to print money, buy assets and keep interest rates in negative territory is persuading people to borrow and spend, and companies to invest. European unemployment is following the downward trajectory of that in the US and Japan, albeit around five years behind.

Even Mario Draghi, ECB president, is sounding more upbeat. “The economic ex--pansion in the euro area continues to be solid and broad-based?.?.?.?[and] the latest data and survey results point to un-abated growth momentum in the second half of this year,” he said, presenting the central bank’s latest monetary policy decision in October.

A similar story can be told in Japan, while China’s monetary authorities have ensured its economy continues to expand at a rapid, but controlled pace.

Most governments, too, have eased their austerity programmes, giving more breathing space now that public finances have improved significantly in advanced economies.

Yet the main reason for improved sentiment is that the yearly cycle of over-optimistic forecasts in advanced and emerging economies, which had dogged the global economy since 2010, has been broken.

The absence of significant downgrades to forecasts has been refreshing.

Never keen to let complacency creep in, economists have a habit of pouring cold water on optimism and those at the UK’s National Institute of Economic and Social Research are no exception. In their quarterly assessment of the global economy, published in early November, they concede that “recent months have been characterised by an unusually fav-ourable combination of global economic and financial dev-elopments”. Yet they warn that companies and households should not let the good news go to their heads. “Global growth this year and next seems likely to be as good as it gets,” they warn.

There are concerns that asset markets in general have become so highly valued that a fall is likely soon. Any faltering in markets could exacerbate problems linked to $135tn of global debts, the IMF cautioned in October. “While the waters seem calm, vulnerabilities are building under the surface [and] if left unattended, these could derail the global recovery,” said Tobias Adrian, of the IMF’s financial stability watchdog.

In the US, too, the duration of the up-swing has reached a post-second world war record and experience suggests the risks of a recession increase materially with the length of the previous cycle.

Much of the growth has represented a recovery from the global financial and economic crisis of 2007-09, but it has become clear that the und-erlying performance of the global economy will be weaker in future than before the crisis.

Among large economies, apart from in India, estimates of the potential for economic progress have been scaled back alongside evidence that productivity growth — the ability of economies to improve their efficiency in turning labour, land and capital into output — has slowed across the world.

Politics is also rearing its ugly head as a threat to global economic progress. While Mr Trump’s “America First” language has not yet materialised as a significant slide towards protectionism, the risks of global trade wars are higher than ever with tensions in the negotiations over the North American Free Trade Agreement, Brexit talks under severe strain, and the US withdrawing from the Trans-Pacific Partnership trade pact. World trade growth has been lacklustre and has not convincingly broken out of its low growth phase since the global financial crisis.

The test of the global economy will be in the longevity and strength of the current buoyant period. Although forecasts have not yet been revised much higher, the clouds have lifted for the time being. Mostly, countries are simply happy to enjoy a period of stability and greater optimism after a dismal decade. That is fine for 2017, but soon the hard work in prolonging the recovery and protecting the world against a future downturn must begin in earnest.