The Thai government and the International Monetary Fund have agreed that the troubled Thai economy looks set to return to growth next year.

The agreement came after the Cabinet approved a new letter of intent outlining economic and policy targets, legislative reforms and social development programmes.

A senior IMF official, Anoop Singh, the deputy director of the Asia Pacific region,was reported as saying that he was convinced the Thai government would pass controversial economic reform legislation but he warned that any prolonged delay in doing so would be costly.