This comes after former prime minister Najib Razak said the ratio of debt to gross domestic product had already surpassed the 60% limit compared to the 58% figure announced by the government.

Najib said the 58% was achievable because the government’s calculations did not take into account foreign debt, as was done by previous administrations and other countries.

He said this should be corrected, either by increasing the debt limit to 65% or reducing debt.

Universiti Tun Abdul Razak economist Barjoyai Bardai said the government should increase the debt limit so it can spend more during challenging times.

He said the economy needs a sufficient catalyst to drive economic growth.

“The rule of thumb set by the International Monetary Fund and rating agencies in determining prudence of an economy does not really apply during an emergency.

“In theory, the Cabinet can advise the Yang Di Pertuan Agong to approve amendments in emergency ordinance to increase the debt ratio, previously set at 60%.”

Last August, the government increased the debt ceiling from 55% to 60% through the Temporary Measures For Government Financing (Coronavirus Disease 2019 (Covid-19)) Bill 2020.

Meanwhile Yeah Kim Leng of Sunway University’s Business School said an increase of the debt ceiling to 65% should only be a short-term solution while the Covid-19 vaccination was being rolled out.

He said the likelihood of the debt ceiling being dropped to 55% again is slim as long as the pandemic continues. “It will take a few years before we can lower the debt ceiling, the earliest would be 2022 and this is provided there is no major health or economic crisis again.”