Thailand dodged recession as its economy grew 0.9 percent in the second quarter, data showed Monday, after the military ended months of political deadlock with a coup and promised to unshackle state spending.
Between April and June the economy grew 0.9 percent after shrinking a revised 1.9 percent in the first quarter, the National Economic and Social Development Board reported.
The junta, under coup-leading Army Chief Prayut Chan-O-Cha, has pegged its legitimay to improving the economy after months of political protests paralysed government spending, scared off tourists and battered consumer spending.
Since seizing power on May 22, Prayut has opened state coffers -- kick-starting stalled investment projects and paying debts to rice farmers to help spur agriculture.
On a year-on-year basis, the economy grew 0.4 percent after contracting by 0.6 percent in the earlier quarter, NESDB said.
Despite the positive momentum, the board trimmed its growth outlook for 2014, forecasting 1.5-2.0 percent expansion, down from a previous estimate of 1.5-2.5 percent.
The board said the political turmoil of the first five months of 2014 would likely cause the economy to "perform below its potential" over the full year, with tourism numbers and car sales still disappointing.
The lucrative tourism sector was hammered by the protests and subsequent military takeover, with visitor numbers down just over 12 percent year-on-year.
But Thai tourism officials have been at pains to reassure visitors that the country is safe, despite the retention of tough martial laws across the kingdom.
On Monday, an army-appointed National Legislative Assembly began the process of agreeing a budget for 2015, raising hopes it may free up more government spending.
Analysts expect domestic demand to creep back as the junta's policies kick in.
"Growth prospects have brightened since the military takeover, which reduced political uncertainties and restored relative peace to the country," said analysts Capital Economics in a briefing note.
"Nonetheless, the economy continues to face several headwinds, such as high household debt burdens. As such, growth is unlikely to return to its trend rate anytime soon."
The kingdom had enjoyed a reputation as "Teflon Thailand" for its enviable record of economic resilience in the face of the last eight years of political upheaval as well as devastating floods in 2011.