BANGKOK - Thailand's economy expanded 0.9 per cent in April-June from the previous three months, avoiding a technical recession, the planning agency said on Monday.
It said that Thailand in the second quarter grew 0.4 per cent from a year earlier, and in the first half contracted 0.1 per cent from the year-earlier period.
The planning agency cited improved exports, eased political tensions and resumption of public spending plus a pick-up in consumer and business confidence as reasons for growth in the second quarter.
The agency also revised its full-year growth forecast to 1.5-2.0 per cent rather than 1.5-2.5 per cent.
The army seized power on May 22, saying this was needed to end tensions and get the stumbling economy - hurt by months of a political crisis - back on track.
A Reuters poll of economists had forecast quarter-on-quarter growth of 0.9 per cent in April-June, and year-on-year expansion of 0.3 per cent.
The National Economic and Social Development Board, which compiles GDP data, revised the on-quarter shrinkage for January-March to 1.9 per cent from 2.1 per cent reported earlier.
The first quarter shrinkage reflected the economic damage from a political crisis that hit consumption, confidence and tourism.
Some pillars of the Thai economy remain shaky. Consumption remains subdued and auto sales are tumbling.
The key tourist industry, which accounts for about 10 per cent of GDP, has not fully recovered. In April-June, the there were 12.3 per cent fewer visitors than a year earlier, and hotel occupancy rates were about 48 per cent. In July, the number of tourists fell 10.9 per cent from a year ago.
Far From Robust
Gundy Cahyadi, an economist with DBS Bank in Singapore, said"the outlook is still far from being robust."
"GDP growth momentum is likely to pick up in late 2014 but a return to near-term potential will still take some time, even if the government is going to be clearly pro-growth," he added.
The junta has made delayed payments to rice farmers, approved infrastructure projects and accelerated approvals for private investment applications halted by political unrest.
Exports are equal to more than 60 per cent of the economy, so sustained growth gains depend on raising shipments. Weak exports have hit factory output. In April-June, exports rose just 0.6 per cent from a year earlier and factory output fell 5 per cent.
The central bank has forecast economic growth of 1.5 per cent this year, after a solid rebound in the second half, and robust expansion of 5.5 per cent next year.
The Bank of Thailand's monetary policy committee has kept the policy rate at 2.0 per cent since April, and many economists expect it will remain at that level as the central bank waits for steps by the government to get economic growth going. The next meeting to review policy is on Sept. 17.