THE U.S. economy has turned in a stellar performance this year. But mounting problems, from trade tensions to jittery financial markets and political gridlock in Washington, are expected to sharply slow growth in 2019.

The U.S. Commerce Department estimated Friday that the economy, as measured by the gross domestic product, grew at a brisk 3.4 percent annual percent rate in the July-September quarter. That was barely down from an estimate of 3.5 percent that the government made a month ago. That performance followed a sizzling 4.2-percent annual growth rate in the April-June quarter.

Analysts have said they think growth has remained solid in the current October-December quarter, with many forecasting annual growth of around 2.5 percent to 2.8 percent.

That would put the economy on track to record growth for all of 2018 of around 3 percent. It would be the best performance since 2005 and well above the tepid annual growth rates of roughly 2 percent that have prevailed since the recession officially ended in 2009.

President Donald Trump has often cited the upturn in growth this year as evidence that his economic program is succeeding. Economists agree that the US$1.5 trillion tax cut U.S. Congress passed a year ago, along with a boost in defense and domestic spending approved by Congress in February, helped fuel growth this year.

But an array of risks lie ahead. They range from a slowing global economy, disruptions caused by the trade disputes, higher borrowing costs for consumers and businesses as the Federal Reserve raises interest rates to control inflation and the potential shock to business and consumer confidence shaken from steep declines in stock prices.

“We have a dysfunctional government in Washington, and that is just adding to all the uncertainty about the economy,” said Sohn Sung-won, chief economist at SS Economics. “The political fights are coming on top of uncertainty over how the trade fight with China will get resolved and where the Fed goes next with monetary policy.”

The Fed raised its key policy rate on Wednesday for the fourth time this year but reduced its estimate of the number of rate hikes for 2019 from three to two. Still, the Fed’s actions and a news conference by Chairman Jerome Powell failed to ease fears on Wall Street that the central bank may overdo its rate tightening and end up pushing the economy into a recession.

Sohn said he expects growth to slow to around 2.3 percent next year.

“I don’t expect we will have a recession, but there will be a significant slowdown,” he said.

Mark Zandi, chief economist at Moody’s Analytics, said he expects growth to slow only slightly to 2.7 percent in 2019. But then he foresees a much sharper slowdown to around 0.9 percent growth in 2020.

“I think the economy will come to a virtual standstill by the spring of 2020,” Zandi said. “The government stimulus in the form of tax cuts and extra spending will have faded by then, and the economy will be struggling with higher interest rates.”

The Trump administration foresees a rather sunnier economic future. It projects that after reaching 3 percent growth this year, the economy will achieve sustained annual growth rates of around 3 percent over the next decade.(SD-Agencies)