The tax base remains narrow, with a large share of revenue still linked to the performance of the aluminium and cotton sectors, which presents an ongoing risk to the government's fiscal targets. The 2010 budget targeted a deficit of 1% of GDP, compared with 0.5% in 2009. Data for January-November 2010 show a surplus of 0.9% of GDP, but we estimate that higher spending in December, as government institutions rushed to use up their spending quotas, will have pushed the budget into a small deficit over 2010 as a whole. The 2011 budget approved by parliament in October 2010 targets a deficit of 1% of GDP. High levels of social spending will put pressure on the budget in 2011-12, but we expect the deficit to remain small, as a pick-up in household consumption-owing to higher inflows of remittances-pushes up receipts from value-added tax (VAT). International aid will continue to meet some of the government's spending requirements in 2011-12.