Thailand is to pay off its debts to the International Monetary Fund (IMF) a year early, the prime minister has said.

Thailand received an IMF bailout of more than $17bn (�11bn) to help it cope with the Asian financial crisis, following the devaluation of the Thai baht in 1997.

According to Thailand's central bank, the South East Asian country still owes $1.2bn to the IMF.

"We can pay it all by next January," Prime Minister Thaksin Shinawatra said on a local business radio show.

Improving economy

The prime minister said the early repayment would help Thailand's economy by saving on interest charges.

The brighter outlook for the Thai economy has encouraged the government to return to the international bond market to raise money. It has also won an improved credit rating.

Mr Thaksin's promise of early debt repayment co-incided with press reports that the government is poised to raise its forecast for economic growth this year.

The central bank has predicted the economy will grow by between 3% and 4% in 2002, much better than last year's rate of 1.8%.

Its monetary policy committee held an unscheduled meeting on Monday, after which it insisted the bank will stick to its current forecasts.

A spokesman said the Bank was not alarmed by weak exports in the first half of this year.

The Finance Ministry reportedly believes the economy will expand by 4.1% this year.

It has calculated that exports will rise by 1.1% to give a trade surplus of $2.7bn, local papers have said.

The Ministry has not yet commented on the reports.

Thailand is planning its first sortie onto the international bond market since the 1997 crisis in October and hopes to raise $1bn.

Credit rating agency Standard & Poor's raised its rating on Thailand to stable from negative earlier this month.