SINGAPORE (Nov 27): The Economist Intelligence Unit (EIU) has cut its 2019 growth forecasts for the global economy amid heightened geo-political risks on the horizon.

“Global industry faces five major risks that could derail growth in 2019: a US-China trade war, a global economic slowdown, Brexit, sanctions on Iran, and cybersecurity risks,” EIU says in a new report released today.

While the US-China trade conflict has already come to a head in 2018, EIU says “there is a risk that this will escalate into a full-blown global trade war” with the US already poised to impose more tariffs on the remaining trade between the two.

“That would disrupt supply chains, particularly for the automotive and consumer goods industries. It could also undermine business and consumer confidence, dampening investment and private consumption,” EIU explained.

At the same time, it says sanctions on Iran could push up global oil prices in 2019 following the US's decision to backtrack from the international Joint Comprehensive Plan of Action.

Also among the major risks for global businesses is the UK's exit from the EU in March 2019. “[Brexit] will impact sectors including financial services, automotive and healthcare, regardless of any deal that is struck,” EIU says.

Meanwhile, the research unit warns emerging markets would be vulnerable to an outflow of capital with the US also due to raise interest rates further.

However, EIU still expects emerging markets to pick up speed, unless the US tightens interest rates faster than expected or US sanctions on Iran disrupt oil markets.

In particular, the research unit examined the impact that these could have on six business sectors worldwide: automotive; consumer goods and retail; energy; financial services; healthcare and pharmaceuticals; and telecoms.

“We do expect all six of these industries to carry on growing in 2019, but companies will need to manoeuvre adroitly to avoid the increasing barriers to business," says Ana Nicholls, director of industry operations at EIU.