JOHANNESBURG, Sept 4 (Reuters) – The International Monetary Fund said on Wednesday that South Africa needed to pursue ambitious fiscal consolidation to restore the sustainability of its public finances.

“Durable expenditure-based consolidation of at least 3 percent of GDP over the next three years is required to place debt on a sustained downward path, while protecting vulnerable groups,” the IMF said in a statement.

The Fund said South Africa’s new government should build on a pre-existing reform agenda while increasing its ambition and accelerating implementation.

“The new government should use the opportunity of a new mandate to implement bold reforms to address long-standing challenges and achieve the economy’s full potential,” it said.

South Africa’s African National Congress has formed a broad coalition with several parties including the market-friendly Democratic Alliance after losing its parliamentary majority for the first time in 30 years in a May election.

(Reporting by Bhargav Acharya; Editing by Alexander Winning)