Bourse and Bazaar | AFP: The International Monetary Fund on Tuesday�predicted Iran's economy will sink deep in the red due to renewed US sanctions�but forecast increased Saudi growth on the back of higher oil production.

In its World Economic Outlook, the IMF said the oil-dependent economy of�the Islamic republic is expected to shrink by 1.5 percent this year and by 3.6�percent in 2019.

In May, before US President Donald Trump announced reinstating sanctions�against Tehran, the IMF had projected Iran's economy would grow by 4.0 percent�in 2018 and again next year.

The IMF said the Iranian economy was now expected to contract over the next�two years "on account of reduced oil production, before returning to modest�positive growth in 2020-23.�

Trump withdrew the United States from the 2015 nuclear deal between Iran�and world powers in May, and his administration reimposed a round of sanctions�on the Islamic republic in August.

Iranian crude exports, which reach some 2.5 million barrels per day�normally, have plunged by over half a million bpd and are expected to dive�further when expanded sanctions on oil take effect next month, depriving�Tehran of its main source of income.

The IMF also sharply slashed growth forecasts for the whole Middle East and�North Africa region due to the slump in the Iranian economy and increased�energy costs.

It now projects the MENA region to grow by 2.0 percent this year and 2.5�percent in 2019, 1.2 percent and 1.1 percent lower, respectively, than it�forecast in April.

"The downward revisions reflect to an important extent the worsening of�growth prospects for Iran, following the reimposition of US sanctions," it�said.

The IMF, however, lifted its projections for economic growth in Saudi�Arabia, the region's biggest economy, and its oil-rich neighbours in the Persian Gulf.

It said the Saudi economy, which contracted by 0.9 percent last year, is�expected to grow by 2.2 percent in 2018 and 2.4 percent next year, raising�previous projections by 0.5 percent.

The growth is being "driven by a pickup in non-oil economic activity and a�projected increase in crude oil production in line" agreed by the Organization�of the Petroleum Exporting Countries and independent producers, the IMF said.

Oil prices, which account for about 80 percent of Saudi public income, have�increased by more than 70 percent since June last year to over USD 80 a barrel.

The London-based Capital Economics think-tank said last week that revenues�of Saudi Arabia and the five other Persian Gulf states are expected to rise by USD 200�billion this year compared to 2017 due to high oil prices and output.