Gross domestic product (GDP) expanded 1.2 percent in the October-December period from the previous quarter, and by 3.8 percent compared with a year earlier, the government's economic planning agency reported.

For the whole of 2010, the economy grew 7.8 percent, it added.

The economy suffered two back-to-back quarterly contractions through September; meeting the usual definition of a technical recession -- grip by a strong baht and a wobble in the global economy.

But economists have played down the relatively small contractions as a bump on the country's growth path rather than a severe down-turn.

Growth is, however, expected to slow sharply in 2011 to within a range of 3.5 and 4.5 percent, said Arkhom Termpittayapaisith, secretary-general of the government's National Economic and Social Development Board.

The agency expects exports to increase 12.5 percent this year.

It lifted its inflation projection to a new range of 2.8-3.8 percent, from 2.5-3.5 percent previously.

Thailand's central bank in January raised interest rates to 2.25 percent -- the fourth increase in six months -- citing inflation risks and solid economic growth. Inflation hit 3.03 percent in January.

The GDP figures added to speculation that the Bank of Thailand may raise its benchmark rate by another quarter point, to 2.50 percent, when its monetary policymakers next meet on March 9.

The Thai economy remained relatively resilient in the face of violence in Bangkok in April and May of last year sparked by mass opposition street protests that paralysed the retail heart of the city and scared off tourists.

Arkhom said renewed demonstrations by Thailand's rival political factions, who have been back out on the streets of the capital in recent weeks, were not likely to have a significant impact on 2011 economic growth.