Political concerns

"Exports showed signs of improvement but politics remains a factor of concern that could affect investment confidence," Ampon Kittiampon, the head Thailand's state planning agency, the National Economic and Social Development Board (NESDB), told reporters.

"This is reflected by private investment which has not improved much."

"What we see is a pretty sharp recovery in the short term which tails off pretty quickly thereafter, and we think that's a very good thing both for investment markets and also for the world at large"

Max King, strategist at Investec Asset Management in London

Max King, an investment strategist with Investec Asset Management in London, said the "upturn" in the global economy "is going to be very good for corporate profits and therefore pretty good for financial markets".

"In part what we see is a pretty sharp recovery in the short term which tails off pretty quickly thereafter, and we think that's a very good thing both for investment markets and also for the world at large, which are our primary concern, and also for the world at large," he told A Jazeera.

"It's really only the media and the political agenda which want a fast and a sustainable recovery. It is not in the interest of the world at large."

Thailand has been rocked by months of political uncertainty with Thaksin Shinawatra, the former prime minister ousted in a 2006 coup, continuing to challenge the legitimacy of the current government.

Compared to a year earlier, Thailand's second quarter GDP was still down almost five per cent.

Manufacturing surge

The Thai economy sank into recession in the first three months of the year after contracting quarter-on-quarter for two straight quarters.

According to data released on Monday manufacturing resumed growing on a quarterly basis expanding 6.2 per cent.

That followed two quarters of steep contraction when the downturn in world trade flattened demand for cars, electronics and electrical goods made in Thailand.

Government efforts to stimulate the economy have included giving cash handouts to low income workers.

The NESDB has said it expects the Thai economy to shrink between 3 per cent and 3.5 per cent in 2009 compared with 2008.