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 per cent in the three months to June, compared with the previous quarter.

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

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Months of political turmoil before the coup caused a drop in exports, foreign investment and tourism. Analysts believe the coup helped calm political unrest and boost confidence in the economy.

The improving economic outlook has been welcomed by Teesside steel maker SSI UK which is part of Thailand's biggest steel firm, Sahaviriya Steel Industries PLC.

Thailand is a key market for steel made at the firm's Redcar works, which was rescued from mothballing by Thai investors in 2012.

Prayuth Chan-Ocha, who seized power on May 22, has paid money due to rice farmers, capped fuel prices and outlined plans for a new government to revive confidence.