Standard&Poor's July 2002 upgrade of Canada's long-term foreign currency sovereign credit rating reflects the results of many years of restructuring in both the private and public sectors that has created a more resilient economy with low inflation, fiscal and current account surpluses, and a healthy trade sector. Canada's general government debt, which includes all levels of government, is projected to fall below 60% of GDP this year from 90% five years ago. The public sector's external debt may fall below 35% of current account earnings from over 70% over the same interval. Impressive debt reduction and successful inflation targeting gave Canada greater fiscal and monetary flexibility to absorb the negative impact of the recent downturn in the U.S.
