The Washington-based IMF has increased its economic growth forecast for the UAE in 2013 and 2014, while lowering its forecast for the Middle East and North Africa (Mena) region as a whole.

Growth in the Mena region is predicted at 2.1 per cent in 2013, down from 3.1 per cent in the IMF’s last forecast in April. The UAE is expected to grow by 4 per cent this year and 3.9 per cent in 2014, up from the IMF’s previous forecast of 3.1 per cent and 3.6 per cent respectively.

Forecasts for the rest of the GCC region have been downgraded. Saudi Arabia is now expected to grow by 3.6 per cent this year, down from the earlier forecast of 4.4 per cent.

The revision to the Mena growth forecast is largely due to lower oil production in Libya, Iraq and Iran, along with small declines in Saudi output.

Egypt’s growth forecast has been reduced to 1.8 per cent in 2013 and 2.8 per cent in 2014, from 2 per cent and 3.3 per cent respectively. “Political developments will largely determine the pace of policy reforms, confidence and domestic activity against a backdrop of large fiscal and external imbalances,” said an IMF report.

The fund has also lowered its forecast of world economic growth in 2013 and 2014. It now expects global growth this year to be 2.9 per cent, rising to 3.6 per cent in 2014, with the decline due to a downgrade in growth prospects for emerging economies.