Prepare for tax hikes in coming years to fund commitments made by President Jacob Zuma in his state of the nation address on Thursday, an economist said.

Peter Attard Montalto Emerging Markets Economist at Nomura International estimated there were at least R50-billion of additional spending commitments in the coming budget year.

These were for extra infrastructure, expanding education, and the provision of support for basic housing loans.

"There seem then to be clear upside risks to the budget deficit next week unless additional tax measures are taken, or additional efficiency savings are found," Montalto said.

NHI adds to risk

Further budget risks emanated from the hint that the government was going to move forwards with national healthcare insurance.

"Overall, I think tax hikes are now increasingly likely in the coming few years in order to be able to fund all this," he said.

A key implication of the speech was that new industrial policy from the department of trade and industry would arrive very soon.

"This had been one of the cornerstones of the manifesto last year and where markets had some worries around tariffs, expenditure and trying to pick winners," Montalto said.

"The implications of that announcement are significant and in many ways more important for creating jobs and boosting potential growth than any direct interventions that are made."

No sense in jobs claims

Montalto said Zuma claimed in his speech that he had managed to practically meet his half-million job creation target for last year.

"I do not understand this. The data does not appear to bear this out as employment dropped by 870 000 and unemployment rose by 292 000.

"This part of the speech was a distraction from additional measures that were needed."

'Pretty unsurprising'

Montalto welcomed further mention of public sector efficiency.

"Overall I think the speech was pretty unsurprising," he said.

"There was little new policy on the economic front with still no real consensus about the need for fundamental economic change in the country and upside risks to budget."