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 South Africa are supported by its prudent macroeconomic policies, a moderate debt burden, and stable political institutions. These are balanced by continued high reliance on external portfolio inflows in the context of a large current account deficit, and severe structural socioeconomic weaknesses. In particular, pressures on South Africa's balance of payments increase the risk of further currency depreciation and a sharper-than-anticipated correction in the current account deficit, with attendant effects on prospects for trend growth and
