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 significant current account deficit, and severe structural socioeconomic weaknesses. We expect the general government to return to deficits of at least 2% of GDP in the foreseeable future, peaking at more than 4% in fiscal 2009/2010. In view of the downturn, the Treasury
