The ratings on the Republic of Botswana are supported by the strength of the public sector's balance sheet. Public sector net external assets, estimated at about 130% of current account receipts (CARs) in 2005, are among the highest recorded by rated sovereigns, bolstering the government's capacity to absorb potential shocks. Conversely, HIV/AIDS-related spending pressures (up to 3%-4% of GDP annually in additional health care and social spending) and stagnating mineral revenues represent growing fiscal challenges. Nevertheless, the government--which has built a track record of prudent fiscal policies--is expected to curb spending growth in non-priority areas, as witnessed in the 2005 budget decision to freeze public service salaries, to secure sustainable budget outcomes. Although fiscal deficits since 2001/2002 averaged about 3%
