The ratings on the Republic of Botswana are supported by: The strength of the public sector's balance sheet, and expenditure flexibility. Public sector net external assets, at about 130% of current account receipts in 2003, are among the highest recorded by any rated sovereign, bolstering the government's capacity to absorb potential shocks. Fiscal deficits since 2001/2002, mainly due to cyclical factors, do not reflect a change from the government's policy of sustainable budgets, and the general government is projected to return to broad balance this year. Looking ahead, the HIV/AIDS epidemic could require additional health and social spending of 3%-4% of GDP annually. However, the government, which has built a track record of prudent fiscal policies, is expected to curb
