During the mid-2000s, South Africa built up ample fiscal space that enabled a robust countercyclical response to the 2008 recession. However, since then, substantial deficits and the slow economic recovery have eroded South Africa's debt position relative to its peers. Beyond the medium term, as the economy strengthens, South Africa will consolidate the fiscal position by maintaining a rate of expenditure growth commensurate with increasing economic potential and reducing the debt-to-GDP ratio.