The government may have little choice but to hike VAT come February’s budget as economic growth is still struggling, weighing on the state’s ability to collect tax and meet the demands of cash strapped state-owned enterprises (SOEs).

This is the call Absa made in its outline for the economy in the months ahead. It joined the likes of the International Monetary Fund (IMF), the World Bank, and Nedbank in cutting its growth expectations for the economy. Absa now expects growth for 2020 to come in at 0.9%, down from 1.4%.

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