What should be the safe limit of fiscal deficit as a percentage of gross domestic product?

Fiscal deficit refers to the shortfall in the income of the government as compared to the spending by the government. To ascertain the fiscal strength of the country, one calculates the fiscal deficit as a percentage of Gross Domestic Product of the country.

Generally, the safe limit of fiscal deficit as a percentage of GDP is considered to be the maximum 3%. When the fiscal deficit crosses the 3% mark for any country, then it is a worrying sign, especially for the developing economy. Higher fiscal deficit will start affecting the economic growth of the country. In 2009, after the 2008 crisis, the United States had 9.7% of the GDP as a fiscal deficit, but the US had taken immediate steps to lower down their fiscal deficit in order to improve their fiscal strength.