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Global credit conditions will weaken in 2019 amid slowing growth and rising risks, says Moody’s Investors Service in a report published Monday.

The New York-based credit rating agency forecasts global credit conditions deteriorating in 2019, as “growth decelerates, funding costs increase, liquidity tightens and market volatility returns.”

Risks, such as trade, political and geopolitical risks, will likely escalate next year due to growing tensions between the United States and China, the report says.

“Geopolitical and domestic political tensions will dominate the risk landscape for global credit conditions and credit quality in 2019,” Moody’s says in the report. “Tensions between the U.S. and China will spread far beyond trade disputes, while the risk of the United Kingdom withdrawing from the European Union without a trade agreement in place has risen. Meanwhile, domestic political risks will continue to weigh on the credit outlooks for Italy, Brazil, Turkey and Argentina.”

Moody’s expects that the impact of slower growth will increasingly push debates about globalization and inequality to the political forefront. “For example, the rise in income inequality in the U.S., could further increase political polarization or lead to sudden policy shifts on issues such as immigration,” the report says.

The rating agency also predicts that continued tech innovation will help drive productivity improvements and enhance competition. “Cyberrisks and data privacy issues will add to operational and reputational risks for governments and industries,” it says.

Carbon transition risk will also intensify, Moody’s says, amid new environmental regulations, stricter emissions standards, rapid tech advancements and shifting consumer preferences for green and sustainable products.

“The slowdown in economic growth will give way to even weaker global credit conditions in 2020, while the multitude of risks on the horizon are increasing both in number and severity,” says Elena Duggar, chairwoman of Moody’s macroeconomic board, in a statement. “Tightening monetary policy, worsening economic disputes and slower demand from China are three key drivers that will dominate the weaker growth outlook.”