Poor security dogging Iraq economy

WASHINGTON, Aug 2 (Reuters) - The International Monetary Fund said on Thursday it had completed a fifth review of a $727 million standby arrangement for Iraq, but warned the economy would not advance while violence continued to rage.

"The expansion of oil production is lagging and inflation, while on a downward path, remains high reflecting in large part shortages associated with the security situation, notably of fuel products," the IMF said in a statement.

"A turnaround hinges critically on an improvement in the security situation," it said.

The United States has rushed 30,000 extra troops to reinforce a clampdown aimed at stemming sectarian violence which has pushed Iraq to the brink of all-out civil war.