On July 14, 2004, Standard&Poor's Ratings Services affirmed its 'BBB/A-3' foreign currency and 'A/A-1' local currency sovereign credit ratings on the Republic of South Africa. The outlook is stable. The ratings reflect South Africa's prudent macroeconomic policies, moderate debt burden, and political stability, balanced by severe structural economic weaknesses and still modest (although improving) external indicators. South Africa's 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 in the public debt burden. The external debt burden is manageable and decreasing, estimated at 20.5% of GDP in 2004. A further strength is
