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IMF raises growth forecast for oil-rich Gulf countries

THE LEVANT – The International Monetary Fund on Tuesday lowered its economic growth forecasts for most Arab countries although it said growth in oil-rich Gulf nations will remain strong.

In its semi-annual World Economic Outlook, the IMF said the Middle East and North African (MENA) region would grow by 2.6 percent this year, compared with 3.2 percent forecast in April.

But it added that growth in the six-nation Gulf Cooperation Council (GCC) states is projected to remain strong at an average 4.5 percent in 2014 and 2015.

The IMF increased its economic growth projections for Qatar, Saudi Arabia and the UAE, but lowered those for Kuwait.

It also warned of oil price fluctuations due to weaker demand and increased non-OPEC production, particularly from the United States.

Globally, the IMF cut its economic growth forecasts for the third time this year, warning of weaker growth in core euro zone countries, Japan and big emerging markets like Brazil.

The Washington-based body cut its expectations for global growth to 3.3 percent this year and 3.8 percent next year. The IMF in July had expected economic growth of 3.4 percent in 2014 and 4 percent in 2015.

The IMF has now cut its current-year growth forecasts nine out of 12 times in the last three years as it consistently overestimated how quickly richer countries would be able to pull free from high debt and unemployment in the wake of the global financial crisis in 2007-2009.

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