This means the budget deficit will increase to around seven percent but economists say government has room to move because of its relatively low level of debt.

Efficient Group Economist Dawie Roodt said the country's three main tax collection mechanisms had been hit by the recession.

"I expect an under recovery of R10-billion, in the case of companies the under recovery could be in excess of R30-billion and in the case of value added taxes the under recovery can be in the region of R25-billion," said Roodt.

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