As government spending grows and governments become more reliant on fiscal policy to counter the risks of economic recession, controversy is being raised over the acceptable and agreed budget deficit, the extent to which the economy is stable and financial sustainability can be guaranteed.
Paul: One of the best standards of a nation's debt is it's "Debt to GDP ratio". See below:
"...A study by the World Bank found that if the debt-to-GDP ratio of a country exceeds 77% for an extended period of time, it slows economic growth.
Every percentage point of debt above this level costs the country 1.7 percent in economic growth. It's even more pronounced for emerging markets. There, each additional percentage point of debt above 64 percent will slow growth by 2 percent each year..."
Link: https://www.investopedia.com/terms/d/debtgdpratio.asp
As per IMF guidelines I think up to 5% is reasonable. Therefore many countries use it as stimulus for economy.
as per IMF guideline upto 5 % in high inflation . but in creeping inflation no such limit define
The budget deficit indicates the balanced economic policy of the government. A significant deficit is a bad sign. Therefore, I consider the recommendations of the IMF quite balanced.
For those non-reserve currency countries, as low as 60% of GDP as one of the rating criteria. Some of the very successful countries have debt to GDP >100% like Japan and US. India has high debt to GDP. There is no standard ratio but the key is whether debt contribute to growth (GDP). It it does the ratio will still be manageable. because the denominator grows faster than the numerator.
As per IMF guidelines I think up to 5% is reasonable. Therefore many countries use it as stimulus for economy. The budget deficit indicates the balanced economic policy of the government. A significant deficit is a bad sign.