The ratings on the Republic of Argentina reflect: A declining external debt burden; and A higher level of human development than in similarly rated sovereigns. The ratings are constrained by: A high debt burden; The legacy of weak public institutions and legal and regulatory uncertainties that affect medium-term investment and growth prospects; and Limited monetary flexibility. The ratings on Argentina reflect the impressive improvement in the sovereign's external liquidity, combined with a falling debt burden. Net external debt may decline toward 77% of current account receipts in 2007 from around 100% last year. Total public sector debt may fall toward 50% of GDP during the course of 2007 from nearly 70% last year. Impressive current account and fiscal surpluses, combined
