It was a refreshing change to see Isham Jalil step away from his usual political commentary and return to economics — after all, economics is his actual vocation.
As an economics graduate from an Ivy League university in the United States, a former civil servant, and a former officer in the Prime Minister’s Department, one would expect him to be most comfortable discussing fiscal policy rather than engaging in personal attacks and political polemics.
Political blogger Jepry Jaws once contrasted Isham with Nurhisham and observed that much of Isham’s public commentary tends to revolve around political attacks, emotional narratives, and one-sided arguments. Unfortunately, despite his prominence on social media, his political influence remains limited. He has yet to demonstrate significant electoral appeal, having struggled even at the party grassroots level.
Perhaps that is why his recent appearance on Shamsul Akmar’s Khabarnya podcast was particularly interesting. For once, Isham was discussing economics rather than politics. Unfortunately, the economics was not much better than the politics. The Harvard economic graduate couldn't pin down a Minister of Finance with a Malay Study degree from a local University.
During the interview, Isham claimed that Prime Minister Anwar Ibrahim had effectively “maxed out the nation’s credit card” by raising debt levels close to the statutory ceiling of 65% of GDP. He further suggested that the government had borrowed RM300 billion, leaving little room for additional borrowing to finance a stimulus package.
There are several problems with his argument.
First, the statutory debt limit may be 65% of GDP, but as of the first quarter of 2026, federal government debt stood at approximately 61.9% of GDP. That is almost 3% below the ceiling. In ordinary conversation, three percentage points may sound insignificant. In public finance, when the denominator is the entire Malaysian economy, it is a very large difference.
Second, one has to ask where exactly the RM300 billion figure came from. Government borrowing to cover fiscal deficits has actually been on a declining trend:
- 2021: approximately RM100 billion
- 2022: RM99 billion
- 2023: RM92.6 billion
- 2024: RM76.8 billion
- 2025: RM76.7 billion
- 2026: RM74.6 billion
These figures are available from official government statistics. If Isham possesses an alternative dataset or has established a secret economic research institute somewhere between podcast recordings, he is more than welcome to publish the findings for public scrutiny.
Public Finance and Fiscal Responsibility Act 2023
What makes the claim even more puzzling is that it ignores the introduction of the Public Finance and Fiscal Responsibility Act 2023. The legislation was specifically enacted to strengthen fiscal discipline, reduce dependence on debt financing, and gradually lower the debt burden over time.
More importantly, the law restricts practices that previous administrations frequently relied upon — off-balance-sheet financing through government guarantees, public-private partnerships (PPPs), private finance initiatives (PFIs), and special-purpose vehicles. These mechanisms are hardly unfamiliar to Isham, given his years within government.
The reality is that much of Malaysia’s current debt burden was accumulated over many years and across multiple administrations. The present fiscal strategy is therefore not to borrow aggressively but to moderate new borrowing, contain spending growth, and gradually reduce debt ratios within a legislated framework.
In other words, the debate is no longer about how much debt can be accumulated. It is increasingly about repayment capacity, debt sustainability, and ensuring that public finances continue to support citizens' needs without imposing excessive burdens on future generations.
Boasting demand for supply crisis?
This leads to the third flaw in Isham’s argument: the assumption that the government should respond to current economic challenges with a large debt-funded stimulus package.
That would make sense if Malaysia were facing a demand-side recession. However, much of today's economic pressure stems from supply-side disruptions — higher energy costs, supply-chain vulnerabilities, food security concerns, labour shortages, and geopolitical uncertainties.
Here, Isham appears to have committed a rather fundamental economic error. Or perhaps he is simply too young to remember the lessons of the 1970s supply shocks. One would imagine that Harvard, like most economics faculties, spent at least a lecture or two discussing them.
When the problem is supply, boosting demand through massive stimulus often risks worsening inflation rather than solving the underlying issue.
What is required instead is economic restructuring: strengthening energy security, improving food production capacity, expanding strategic manufacturing, enhancing logistics resilience, investing in infrastructure, and developing technical skills. These measures are neither glamorous nor politically exciting, but they address the actual source of the problem.
Most importantly, they can be pursued while maintaining fiscal credibility and public confidence — without any need to "max out the national credit card."
Debt inherited
Finally, some historical context is necessary.
Malaysia's statutory debt limit was raised from 55% to 60% of GDP in August 2020 during the Covid-19 crisis. It was subsequently increased again to 65% in 2021 to accommodate the massive pandemic-era stimulus programmes.
As a result, the debt ratio rose from approximately 58% to a peak of 63.3% in 2021.
By August 2023, the ratio had declined to 59.9%. It subsequently increased again and reached around 63.9% by June 2025 — a figure that appears to have formed the basis of Isham’s criticism.
The problem is that the latest available figure is approximately 61.9%. In other words, the data he cited is roughly nine months out of date.
Nine months may not sound like a long time in politics. In economics, however, it is an eternity. A budget can be tabled, policies can change, markets can move, and, as they say, a baby conceived when those numbers were current would have already been born by now.
For someone criticising the government's economic management, updating the spreadsheet before appearing on a podcast would have been a good place to start. A good critic is certainly welcomed over rude and crude howling of "Hoi!"
Goodbye Yellow Brick Road
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