DUBAI, Jan. 22 (Xinhua) -- The International Monetary Fund (IMF) said Monday that stronger oil prices "are helping a recovery in domestic demand in oil exporters."

The IMF said growth in the Middle East would reach 3.6 percent in 2018 and 3.5 percent in 2019, up from an estimated 2.5 percent last year.

For oil exporters, domestic demand would be lifted because of an "improving global growth outlook, weather events in the United States, the extension of the OPEC agreement to limit oil production, and geopolitical events in the Middle East."

The global economy, the IMF said would post 3.9 percent in 2018 and 2019, revising its fall 2017 forecast by 0.2 percentage points based on "notable upside surprises in Europe and Asia" and on the expected impact on tax cuts by the United States.

For Saudi Arabia, the IMF forecasts for 2018 and 2019 an uptick in economic growth 1.6 percent and 2.2 percent, respectively, up from a 0.7 percent contraction last year.

Nevertheless the Arab oil exporting nations still have to adjust their fiscal policy which is going to keep higher growth at bay, said the IMF.

Saudi Arabia and the United Arab Emirates have started to raise a 5 percent value-added tax, a first in the Gulf states' history, but its fellow Gulf states like Kuwait and Bahrain have yet to follow.

Earlier in the month, the price of oil (Brent) has reached a three-year high at 70 dollars per barrel, reversing a slump that started in mid-2014 when the "black gold" fell from 110 dolar a barrel.