Trump's tax plan alone won't get him the 3% economic growth he hopes for, Mohamed El-Erian warns

Key Points
  • "You need more," the Allianz chief economic advisor argues, citing infrastructure spending and the need to boost productivity.
  • The White House has not released enough details of President Trump's tax plan to make a full economic forecast, El-Erian says.
  • "I think we're going to see the details in the next few weeks," he predicts.
El-Erian: To sustain market move, need tax details and implementation

The White House has not released enough details of President Donald Trump's tax reform package for individuals and corporations to forecast how it will impact the U.S. economy, leading economist Mohamed El-Erian told CNBC on Thursday.

But one day after administration officials outlined the plan, El-Erian did say that one thing is for sure, "Tax reform and the tax plan in itself is not sufficient to deliver 3 percent growth," a baseline number the president and his economic advisors have said they at least want to achieve.

"You need more," the Allianz chief economic advisor argued, citing what he believes would be a benefit of Trump's promised $1 trillion in spending to upgrade the nation's infrastructure systems. He said a boost in what's recently been historically low productivity also would help the economy.

On tax cuts, El-Erian said, "The most important part is when do we get the details — not just of the tax plan itself, but of how it's going to move through Congress and get implemented."

"If you want to get it done by the end of the year, and that's what the administration has said over and over again, you're going to have to come up with details pretty quickly," he added.

But the former Pimco co-CEO predicted that getting tax reform through the House and the Senate is not going to be easy. "I think we're going to see the details in the next few weeks," he said. "And then the market is going to be able to assess implementation risk."

The stock market has been moving higher since the election on the hope that White House and Capitol Hill promises of tax cuts, a repeal of Obamacare and deregulation will happen, and jump-start economic growth.

In the meantime, however, the economy seems to be losing steam. JPMorgan on Thursday pared its estimate on growth to a 0.3 percent annualized rate in the first quarter from a 0.4 percent pace, following weaker-than-expected data on durable goods orders and advance data on the goods trade balance in March.

It's worth noting that CNBC's review of decades of gross domestic product data shows that first-quarter GDP growth has been routinely understated.

The economy grew 1.6 percent for all of 2016, its worst performance since 2011, after expanding 2.6 percent in 2015.

— Reuters contributed to this report.