Hoo Ke Ping said the government was being too optimistic in setting the GDP growth target at 4.8%.
For one, he said, Putrajaya was assuming that petrol would fetch an average price of US$62 a barrel when most analysts were expecting no more than US$60.
He warned of the possibility of a crash in global oil prices and said the government would then find itself in a difficult position.
Hoo also spoke of bleak prospects for palm oil exports, noting that Europe was continuing with its campaign against the use of the commodity, and India had indicated it may buy less from Malaysia.
He said tourism, a key revenue generator, might also suffer from the effects of the trade war between the United States and China.
“The trade war hurts Chinese businesses and this in turn hurts tourism. Across the region, there is a drop in the number of tourists from China,” he told FMT.
Hoo also noted a downturn in the manufacturing sector, saying it was affecting the electrical and electronics sector as well as timber and timber-related products.
He described the current performance of Bursa Malaysia as lacklustre and said the property overhang was weighing on the banking system.
“With banks being burdened and the stock market underperforming, it’s hard to see how companies can raise funds to expand.
“If the government does not review its budget, I believe it will end up having to borrow more or sell more assets to meet the budget expenditures,” he said.
Abu Sofian Yaacob, an economics lecturer at Universiti Putra Malaysia, said it was not impossible for the GDP to grow between 4.5% and 4.8%.
He said this was due to the budget initiatives to boost the economy, and referred specifically to efforts to nurture small and medium enterprises and to attract investments.
He said the GDP could well grow to 5% in the next few years if the government were to encourage the manufacture of innovative products and penetrate new markets.
Abu Sofian suggested that the government encourage the growth of the gig economy as an effort to reduce unemployment.
International ratings agency Fitch has predicted that Malaysia’s GDP growth for 2020 will be 4.5%, and Moodys has said it will be 4.3%.