Bangkok: Thailand's economy expanded more than estimated last quarter as surging exports drove a recovery, countering the impact of political turmoil in April and May that prompted a crackdown on protesters.

Gross domestic product rose 9.1 per cent in the three months through June from a year earlier, the government said in Bangkok today. That compared with the 8 per cent median estimate in a Bloomberg News survey of 11 economists. The economy grew 12 per cent in the first quarter, the fastest pace since 1995, the report showed.

Thailand's SET stock index has surged 17 per cent and the baht has climbed more than 2 per cent against the dollar since May 19, when troops broke up anti-government protests after clashes killed at least 89 people. The strength of the recovery may give the central bank scope to raise interest rates again after moving last month for the first time in almost two years.

"The strong momentum in the export sector has possibly offset the decline in consumer demand" during the deadly political protests, Rahul Bajoria, a Singapore-based economist at Barclays Plc, said before the report. "The Bank of Thailand is likely to continue with its rate normalisation with a 25 basis-point hike most likely to materialise."

Eleven of twelve economists surveyed by Bloomberg News predict the central bank will increase its benchmark rate by a quarter of a percentage point to 1.75 per cent on Wednesday.

Exports of cars and electronics have jumped and tourists are returning to Phuket's beaches after the protests ended, with Finance Minister Korn Chatikavanij predicting this month the economy may expand as much as 8 per cent this year. Thailand is a manufacturing base for companies including Toyota City, Japan-based Toyota Motor Corp.

The central bank expects 2010 growth of as much as 7.5 per cent, which would be the strongest pace since 1995, before the collapse of the baht in 1997 helped trigger the Asian financial crisis, in which Thailand, Indonesia and South Korea were forced to seek International Monetary Fund bailouts.

The country's exports jumped 46 per cent in June from a year earlier, the most in more than 18 years, before cooling to a 20.6 per cent pace last month.