International rating agency Standard and Poor's revised the outlook of Serbia from stable to positive and affirmed the long-term foreign and local currency ratings of the country at BB- and the short-term ones at B. The agency noted that the revision reflects fiscal consolidation initiated by the cabinet, which contributed to a reduction in government debt; good macroeconomic prospects; the cabinet's reform programme; and EU integration and progress towards a Stabilisation and Association Agreement. Standard and Poor's also noted the successful completion of the three-year extended arrangement with the IMF and the subsequent 15% debt write-off by the Paris Club of creditors. Fiscal tightening in 2005 resulted in 1.6% budget surplus last year, and the government's plans to continue with cautious fiscal policies will contribute to a reduction of government debt to 40% this year from 45% in 2005. The upgrade of Serbian rating is constrained by a high current account deficit and the strong acceleration of inflation.