Prudent macroeconomic policies and a moderate debt burden An independent central bank committed to low inflation, well-developed capital markets, and a strong financial sector Political stability and transparent institutions Structural economic weaknesses and deep social inequalities Vulnerability to volatile capital inflows The ratings on the Republic of South Africa are supported by its prudent macroeconomic policies, a moderate debt burden, and strong and stable political institutions. These are balanced by vulnerable external finances because of a continued high reliance on portfolio inflows, and severe structural socioeconomic weaknesses, including income disparities, poverty, high unemployment, and the impact of HIV/AIDS. Rising inflationary pressures in the context of strong domestic demand, rapid credit growth, and large exchange rate movements due to periodical turbulence
