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Thanong, IMF harmony fails to end doubts

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The Thai Government has reached 'complete agreement' with the International Monetary Fund over the goals and direction the economy should take, according to Finance Minister Thanong Bidaya.

Officials and Bangkok-based analysts agreed. Several argued that foreign-market rumours were simply wrong in saying the IMF was already disillusioned with the Thai authorities' ability to implement a tough rehabilitation plan.

But there are indications the fund's officials would like the Thai Government to speed up cutting out the dead wood and restructuring the economy.

'We know the pain is going to get worse before we move into a strong recovery. Our fear is if we don't work quickly enough, the pace of destruction might be faster than the recovery,' one source said.

The key problems most financiers have in mind are dealing with the mountain of bad debt in the financial sector and the drying up of liquidity across the economy.

Mr Thanong echoed the financial community consensus that confidence - a prerequisite for a real recovery - would not return until Thailand had demonstrated how its bad debt mess would be sorted out.

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