But the investment bank characterized the expected deceleration as a “benign slowdown,” expressing optimism that the Chinese government will take measures to boost growth and dispelling concerns of a global recession taking place in the next 12 months.

“In 2018, the U.S. accelerated on [the strength of] fiscal stimulus but the rest of the world decelerated,” Aditya Bhave, senior global economist at BoA Merrill Lynch, said at a media briefing Thursday morning.

In 2019, however, Bhave said he’s expecting “a deceleration in the U.S. as the stimulus fades” while the rest of the world “bottoms out”—with China expected to hover around 6% quarterly annualized growth and European economies due to “pick up late next year.”

After a stronger first half of 2019, the U.S. will likely see its growth rate drop to just north of 2% in the second half of next year, according to Michelle Meyer, BoA Merrill Lynch’s chief U.S. economist.

Despite a tightening of monetary policy that should see the Federal Reserve hike interest rates four times in 2019, Meyer noted a “still expansionary” American economy and floated the prospect that the current, near-record upward cycle could even be expanded further—pointing to steadily increasing labor productivity and lower inflation expectations. The investment bank also cited only a “limited risk of a recession” over the next 12 months, though it added that the outlook for a downturn in 2020 and beyond is “murkier.”

Among the countries potentially in for a rougher ride next year could be Japan, where a consumption tax hike (to 10% from the existing 8%) is set to take effect next October, while the outcome of the ongoing Brexit negotiations on the United Kingdom “is anybody’s guess,” Bhave said.

In Brazil, meanwhile, growth is expected to accelerate on the back of the “market-friendly agenda” of President-elect Jair Bolsonaro, and there has been some relatively good news out of Italy—where a “Quitaly” scenario that would see the country leave the European Union appears increasingly unlikely despite Rome’s ongoing budget dispute with Brussels.

But the biggest question marks looming over the near-term future of the global economy have to do with trade, with the ongoing standoff between the U.S. and China continuing to prove a drag on markets around the world.

While Bhava expressed optimism that the U.S.-China dispute will not evolve into “a broader geo-political conflict” that would see the Trump administration pursue a “containment strategy” against China, he warned of the impact that additional U.S. tariffs on hundreds of billions of dollars worth of Chinese goods could have a “very damaging” effect on industries such as the automobile and auto parts sector—citing the “interconnectedness” of that market’s supply chain, in particular.

Ethan Harris, the bank’s head of global economics, noted that the Trump administration “has saved the most painful tariffs for last” in its trade dispute with China, having thus far restrained from slapping them on consumer products “for which there are no easy alternative in the U.S.”

Harris added that China would likely pursue some form of stimulus should the country’s growth prospects appear to be dimming, particularly in the face of what could be a protracted trade dispute with the U.S. “They’re at a huge disadvantage if their market and economy are imploding while they negotiate,” he said. “They need to do everything they can to inoculate from a trade war.”