While uncertainty and market volatility are set to remain in 2019, the global economy in the new year will likely avoid recession and bring continued growth, albeit at a slower pace in Europe, China and the U.S.

In 2019, volatility will persist and wide swings in the Dow will be common due to the Fed’s interest-rate hikes and, along with the European Central Bank, measures to tighten liquidity. Gone are the days when both central banks are keeping interest rates at very low levels and purchasing securities.

Other causes of volatility in 2019 will be uncertainty over the US-China trade war, Brexit, interest rates, renewed US sanctions on Iran, oil prices, capital flight from developing nations, high Chinese public debt levels and various strains on the eurozone, among them Italy’s continued economic mess amid ongoing efforts to avoid a debt emergency.

The perspective provided by Mohamed El-Erian, chief economic adviser at Allianz (the corporate parent of bond fund manager PIMCO), is helpful here. According to El-Erian, the ongoing market upheaval is part of a normalization of 2017, which saw economic growth, high returns and little to no volatility. While distressing to investors, the ups and downs of the 2018 market and their continuation into 2019 are likely to serve as a healthy development over the long term.

The slowing of Europe and China have also been contributing factors to ongoing volatility.

Europe’s economy is projected to grow at a lower rate in 2019 (1.9%) than its 10-year high of 2.5% in 2017 and 2.0% rate of 2018. Causes of the slowdown include weaker external demand, higher energy prices, labor shortages and constraints in production capacity.

Economic growth is forecasted to slow in the world’s second-largest economy, China, in 2019. Growth slowed in China in 2018 with GDP growth at 6.5% for the third quarter, missing economists’ forecasts of 6.6% and amounting to the weakest quarterly growth since the global financial crisis of 2009. Factors of the slowdown range from the country’s transition from an export-dependent and investment-based economy to one powered by domestic consumption; efforts by the national government to deleverage and reduce the central government’s eye-watering 300% of GDP national debt; the longstanding struggle of private firms facing systematic disadvantages in competing with state-owned enterprises; a temporary contraction of government-backed infrastructure spending; a slowdown in the manufacturing and export sectors; and the effects of US tariffs on Chinese goods, among other reasons.

In 2019, China is likely to face prolonged uncertainties relating to the trade war with Washington and its associated higher tariffs

In 2019, China is likely to face prolonged uncertainties relating to the trade war with Washington and its associated higher tariffs, with forecasts of GDP growth slowing to 6% in 2019 and possibly settling at 6% for 2020.

Despite the rough economic headwinds facing China, policymakers in Beijing will have the means to navigate ongoing challenges with the many tools at their disposal, such as tax cuts, monetary easing and fiscal stimulus via infrastructure spending and other measures.

Concerning the United States, analysts estimate that the American economy will grow at 2.8% in the fourth quarter of 2018 with slightly slower growth, at 2.6%, in 2019. Beyond this, wages are projected to increase by 3.1% from 3% in 2018.

Despite nerves over market volatility, investors can take heart that the US economy is strong heading into the new year. Corporate earnings have been solid, small business confidence is at a record high, consumer confidence is at an 18-year high and unemployment is at a near 50-year low. These fundamentals will help keep global growth positive and will likely be some of the reasons the US will steer clear of a recession in 2019.

While a US recession in 2019 is unlikely, some argue that one could be triggered by a big market accident, a significant policy mistake or a massive calamity.

One way to maintain the American economy’s momentum in 2019 would be for Washington to pursue the infrastructure plan that President Donald Trump campaigned on in 2016. Such a plan, while costly, could keep the US economy on a pro-growth footing and increase productivity. Given the rancor in Washington between Trump and Congress, prospects for a deal on infrastructure as the US approaches the 2020 presidential election may be a far cry.

In 2019, the global economy will continue to see growth. As with 2018, 2019 markets will experience volatility due to different reasons, some of them being changing liquidity conditions, rising interest rates, the US-China trade war and uncertainties relating to slowdowns in Europe, China and the US.