Bangkok, Tuesday
Thailand's reign as the world's fastest growing economy officially came to an end today as the crisis hit Government accepted tough new measures from the International Monetary Fund as conditions for a loan.
Coup rumours, which have been dismissed by the army, swept Bangkok as Prime Minister General Chavalit Yongchaiyudh and his predecessor were accused of bringing the country to its knees.
The Bank of Thailand said the operations of 42 finance companies would be suspended. The stock exchange crashed 3.5% before regulators suspended all trade in banks and finance companies.
Details of the IMF package have yet to be ironed out but they include an immediate 3% VAT rise, bringing it in line with other countries in the region at 10%. More than #7500m of credit is to be granted.
Just three years ago Thailand was riding high after enjoying a ten year, year on year, growth rate of between 7% and 10%.
Critics say the actions of the governments of the last two premiers, Banharn Silpa-archa, and Yongchaiyudh, have led the country to the brink of fiscal collapse.
Former caretaker Prime Minister Anand Panyarachun said yesterday: ''I have never seen Thailand in such a serious crisis. This shows we cannot solve our own problems because there is no faith in the existing system.''
Next month Prime Minister Yongchaiyudh faces a parliamentary no-confidence motion.
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