Thailand's economy avoids technical recession

Tourists walk past discount promotion placards displayed at a shop in Bangkok Domestic spending in Thailand picked up in the second quarter

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Thailand's economy avoided a technical recession in the second quarter, suggesting the country may be back on the path to growth following a military coup in May.

Gross domestic product (GDP) expanded by 0.9% in the three months to June, compared with the previous quarter.

On an annual basis, the Thai economy grew by 0.4% from a year earlier.

Months of political turmoil before the coup caused a drop in exports, foreign investment and tourism.

Krystal Tan from Capital Economics said the coup helped calm political unrest and boost confidence in the economy.

"Growth is set to pick up further in the coming quarters, but it will take time for the recovery to gain a firmer footing," she said.

"The junta has made spurring the Thai economy one of its top priorities since coming to power. For instance, its moves to delay tax hikes, accelerate budget disbursements and clear the way for investment approvals to resume should help support domestic demand."

Thailand's National Economic and Social Development Board, which compiles the growth data, also released revisions to its first quarter figures.

The revised figures show the economy contracted by 1.9% rather than the 2.1% decline initially reported for the period from January to March.

A technical recession is defined as two consecutive quarters of negative growth.

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