On May 24, 2004, Standard&Poor's Ratings Services assigned its 'BBB' senior unsecured debt rating to the Republic of South Africa's new $1 billion global bond due 2014. At the same time, Standard&Poor's affirmed its 'BBB/A-3' foreign currency and 'A/A-1' local currency sovereign credit ratings on South Africa. The outlook is stable. The ratings reflect South Africa's prudent macroeconomic policies, declining debt, and political stability, balanced by severe structural economic weaknesses and still modest (although improving) external indicators. South Africa's prudent fiscal policies are underpinned by budgetary and administrative reforms that have improved fiscal flexibility. This has enabled the government to conduct more expansionary policies and allocate increased resources to social expenditure, without reversing the downward trend
