Pimco expert: Economy will need a new growth model

The biggest challenges for the Greek economy are the matters of strengthening growth and investments, Pimco sovereign credit analyst Nicola Mai noted at a presentation in Athens on Tuesday regarding global financial prospects.

The Italian economist said it is important for Greece to find a growth model that will make it more competitive and strengthen its long-term economic momentum. Greece has the resources, is located in a geopolitically strategic position and has reduced its labor costs to become more competitive, but this has not been passed on to the consumer and export prices, he noted, adding that several sectors must be liberalized to enhance the growth momentum.

According to Mai, the 2.3 percent target the government has set for 2019 is quite optimistic, particularly after the 1.3 percent growth recorded in the first quarter of the year. The economy has the margin to grow as both consumption and investment have remained very subdued for a long period, he said, while the fiscal adjustment has been very aggressive. Now, he said, this is coming to an end, interest rates are falling and there are reasons for demand to recover, stated Mai.