Q3 2019 Supply Wisdom Index: Location Risk Monitor covers global outsourcing markets and ranks key locations based on the Composite Risk score, a comprehensive measure of important location risk criteria.

Q3 2019 Country in Focus:

Ireland

• Ireland remains the fastest growing economy among EU nations. Nonetheless, Central Bank has revised GDP growth for 2020 to 3.0% from 3.3% on the back of a weaker global economic outlook and continued Brexit uncertainty. Overall growth in 2019 is projected at 3.7%, down from 4.1% projected in June 2019.

• Outside of the United Kingdom (UK), Ireland is the country that will be most affected by Brexit. UK is scheduled to leave the European Union (EU) on October 31, 2019. Ireland is particularly exposed to economic turbulence from a no-deal Brexit as UK is the second biggest customer for Irish goods.

• Additionally, Ireland is the only country that shares a land border with Britain. Border issues between Ireland and Northern Ireland remained a key area of negotiation for Brexit. In May 2019, Ireland and United Kingdom signed a deal to continue the Common Travel Area (CTA) after Brexit and facilitate free movement of goods and people. However, there is ambiguity in post Brexit immigration and custom rules.

• Several critical infrastructure projects including the Dunkettle Interchange, the M20, M28, and funding for urban regeneration and social housing projects are getting delayed which might exaggerate the prevailing housing deficit in the country along with loss in economic/business opportunities.

• On geo-political front, Ireland is deemed to be politically stable. During the quarter, no major social unrest/protest was witnessed in the country. However, heavy rainfall and floods have prompted several weather warnings during the period.

Rank	Country	Ranking Change	Overall Risk Score
			Q3 2019	Q2 2019
#1	India	0	4.04	4.02
Indian economy slowed to six-year low primarily due to decline in consumer demand and private investment. However, government reduced corporate tax rate for domestic companies by 8% to boost economic growth rate and incentivize investments to create new jobs. On the geo-political front, several states were affected by heavy rainfall and floods during the period. Macro-Economic Risk Macro-Economic Risk increased significantly primarily due to drop in GDP growth rate and increase in fiscal deficit. Financial Risk Financial Risk decreased mainly driven by deduction in corporate tax rate for domestic companies Geo-Political Risk Geo-Political Risk increased due to heavy rainfall that caused floods across different parts of the country
#2	China	0	4.18	4.19
In August 2019, China’s currency, yuan, slipped to a 11-year low against US dollar. The trade war between the US and China resurfaced with both nations imposing tariffs on each other’s goods. Also, in August 2019, the country was hit by typhoon ‘Lekima’ which affected more than 6 million people in eastern China. Macro-Economic Risk Macro-Economic Risk decreased mainly due to the interest rate cut and improved fiscal balance Scalability Risk Scalability Risk decreased marginally as technology services industry continues to grow Geo-Political Risk Geo-Political Risk remained Low. However, heavy rainfall caused floods and evacuations across eastern parts of China in August 2019
#3	Poland	0	4.50	4.56
In September 2019, the US and Poland signed an agreement to cooperate on 5G technology. Also, telecom companies such as Huawei and Ericsson announced investments in Poland to develop 5G network in the country. Nonetheless, Poland witnessed a decline in its economic growth as a result of shifts in consumer demand. Widening budget deficit also remains a cause of concern for the country. Macro-Economic Risk Macro-Economic Risk increased mainly due to decline in trade balance and fiscal balance Geo-Political Risk Geo-Political Risk declined owing to increase in political stability Quality of Life Risk Quality of Life Risk dropped marginally due to reduced internet costs and pollution level
#4	Ireland	0	4.55	4.59
Irish economy remains one of the best performing economies in the European Union (EU) despite Brexit uncertainties. The central bank has warned that Ireland’s economy could contract in 2020 if the United Kingdom leaves the EU without a deal. Heavy rainfall, floods, and storms also affected parts of the country. Macro-Economic Risk Macro-Economic Risk decreased significantly due to positive fiscal balance and stable economic growth Geo-Political Risk Geo-Political Risk increased as heavy rainfall prompted several flood warnings Scalability Risk Scalability Risk decreased driven by uptick in technology services industry’s annual growth rate
#5	Philippines	0	4.79	4.76
Philippines’ economy recorded its slowest pace since Q1 2015 as both private consumption and government spending eased, while fixed investment shrank. Also, in August 2019, Philippines’ Department of Health (DOH) declared ‘National Dengue Epidemic’ as more than 146,000 cases were reported. Macro-Economic Risk Macro-Economic Risk increased as inflation dropped to three-year low along with negative fiscal balance Geo-Political Risk Geo-Political Risk declined as no major natural disaster occurred during the quarter Scalability Risk Scalability Risk increased due to decline in annual growth rate across technology and business services industries
#6	Mexico	+1	5.00	4.97
In August 2019, Secretariat of Security and Civilian Protection (SSPC) warned about ongoing cyber-attacks following a cyberattack on social networks of Mexican government departments and officials. With respect to the economy, the GDP growth rate contracted for the first time since the fourth quarter of 2009 due to a slump in industrial production. Macro-Economic Risk Macro-Economic Risk increased owing to decline in GDP growth rate due to slump in industrial production Geo-Political Risk Geo-Political Risk decreased due to increased political stability Quality of Life Risk Quality of Life Risk decreased marginally due to reduced pollution level and improved safety level
#7	Colombia	+1	5.03	5.03
Colombia recorded a 10-month high inflation rate in July 2019. Nevertheless, it remained within the central bank’s target rate of 2% to 4%. On the geo-political front, the risk associated with epidemics remained high due to dengue. Further, the country cotinues to face challenges such as large-scale protests, corruption, and drug cartel crimes. Macro-Economic Risk Macro-Economic Risk increased due to decrease in trade balance and foreign direct investment Infrastructure Risk Infrastructure Risk declined driven by improved internet speed in the country Geo-Political Risk Geo-Political Risk remains Moderate. The country reported a surge in dengue cases
#8	Brazil	-2	5.03	4.97
Brazil’s economy remained weak, which led to lack of necessary infrastructure development and high unemployment rate. Natural disasters and frequent protests remain a serious threat to the geo-political stability of the region. Dengue cases increased about 600% in the country and reported a total of 1.4 M cases until August 2019. Macro-Economic Risk Macro-Economic Risk increased significantly primarily due to low fiscal balance and high volatility in currency exchange rates during the quarter Financial Risk Financial Risk increased as drop in rental growth was less compared to previous quarter Quality of Life Risk Quality of Life Risk dropped marginally due to reduction in internet costs and improved hotel room vacancy rates
#9	Vietnam	0	5.09	5.06
Vietnam’s economic growth remained strong and the country reported an increase of 8% in FDI in H1 2019, compared to the previous year. However, cybercrime continues to be area of concern. In May 2019, the country witnessed more than 700 cyber-attacks including 425 cases of website defacement. Macro-Economic Risk Macro-Economic Risk decreased significantly driven by uptick in trade balance during the quarter Financial Risk Financial Risk increased owing to marginal rise in rental growth rate Geo-Political Risk Geo-Political Risk increased as heavy rainfall affected normal life in parts of Vietnam
#10	Hungary	0	5.15	5.10
Hungary rolled out a new investment incentive system to attract more technology-oriented investments in the country effective from October 1, 2019. On the macro-economic front, Hungary’s GDP recorded the lowest growth since Q2 2018. With respect to quality of life risk, heatwave warnings were issued during the quarter. Macro-Economic Risk Macro-Economic Risk increased due to decline in GDP growth rate and fiscal balance when compared to previous quarter Financial Risk Financial Risk increased due to rise in rental growth rate Quality of Life Risk Quality of Life Risk increased due to severe heatwave conditions during the quarter and incline in hotel room occupancy rate