The National Treasury in February forecast a fiscal gap of 4.5% of gross domestic product for the year starting April 1. If realized, it would be the worst since the 6.3% reported in fiscal 2010.

Weak economic growth and chronically high unemployment mean the state would probably miss its initial revenue-collection targets by more than 42 billion rand ($2.9 billion) in the 2018-19 fiscal year, the Treasury said in February.

Debt-ridden state-owned companies such as power utility Eskom Holdings SOC Ltd. are also placing strain on the country’s balance sheet, the IMF said.

“Action is needed to reduce the fiscal deficit, reverse the ongoing increase in public debt, and restore much-needed fiscal buffers to protect the government’s development objectives and its ability respond to shocks,” the institution said.

South Africa is committed to cutting the fiscal deficit and stabilizing debt, and President Cyril Ramaphosa will give more details of the government’s plans to boost growth in his state-of-the-nation speech on June 20, the National Treasury said in an emailed statement.