The government will make only slow progress in bringing its finances close to balance during the next five years. In its budget plans for 2011, the government is targeting a deficit equivalent to 5.4% of GDP. This would represent only a small improvement compared with the estimated shortfall of 5.5% of GDP in 2010. We expect the government to be fairly successful in adhering to its budget plans for 2011, which feature an increase in spending of just 2.8% relative to estimated total expenditure in 2010. Although in the coming five years the government intends to rationalise its subsidies programme (subsidies are currently provided for food and fuel, among other goods and services), in 2011 it will continue to spend heavily on goods and services. Debt-servicing costs will also rise and are expected to account for around 10% of total operating expenditure in 2011. The budget is forecast to remain in deficit in 2012-15. However, assuming that the government reduces its operating expenditure and that it has some success in increasing revenue by expanding the tax base, the deficit will shrink to 3.8% of GDP in 2015. A widening of the tax base is expected to be achieved through the introduction (most likely in 2012) of a goods and services tax (GST), although implementation of the tax is likely to be hampered by opposition from households and businesses. Further moves to alter the subsidy structure could also prove unpopular.