We consider that South Africa's moderately countercyclical macroeconomic policies continue to support stability and external financing. We expect GDP to increase by 3%-4% over the next few years and the government to remain committed to stabilizing general government debt levels at slightly more than 40% of GDP. However, we expect the wider public-sector debt to increase to almost 60% of GDP over the next three years, which in our view reduces South Africa's fiscal flexibility. Furthermore, low national savings and the consequent dependence on external financing through volatile portfolio inflows constrain monetary policy flexibility, in our view. We are affirming our 'BBB+/A-2' foreign currency ratings on South Africa and revising the outlook to stable from negative. At the same time,
