The National Economic and Social Development Board said gross domestic product (GDP) growth at an annual rate was down from a revised 6.1 percent in the first quarter of the year.
The board's secretary general Amphon Kittiamphon said the decline was due to lower government spending and a slowdown in private sector investment.
Despite that, the board forecast the Thai economy would likely grow between 5.2 and 5.7 percent this year, up from its May projection of 4.5 and 5.5 percent.
"If the government pushes forward with its mega projects including infrastructure construction, as well as creating confidence among investors, our GDP in the last six months of this year is most likely to be no less than 5.2 percent," Amphon told reporters.
Volatile global oil prices have already prompted Thailand's central bank to lower its growth estimates for this year to 4.8-5.8 percent. The finance ministry had initially projected 6.0 percent.
Inflation soared to a 10-year-high of 9.2 percent in July due to high fuel and food prices. The Bank of Thailand has estimated that inflation will average 7.5 to 8.8 percent this year.
Analysts said the second quarter slowdown likely indicated the Bank of Thailand will hike interest rates just once more this year from the current level of 3.5 percent. Its rate-setting committee is due to meet on Wednesday.
"(These economic conditions) will limit central bank tightening," Standard Chartered economist Usara Wilaipich told Dow Jones Newswires.
"Therefore, we expect only one more 25-basis-point hike from the Bank of Thailand and this should be the last rate hike for the rest of this year."
The central bank and the finance ministry have reportedly been at loggerheads over the interest rate and how to handle the inflation surge.
The English-language Bangkok Post newspaper reported last week that revered King Bhumibol Adulyadej voiced support for central bank governor Tarisa Watanagase and praised her for steering the nation away from financial woes.
Thailand's government, which was formed in February, has been hit by street protests since May demanding the resignation of premier Samak Sundaravej.
Rumours of a coup circulated in May and June, and the general uncertainty has helped push the Thai stock market down nearly 18 percent since late May.
A World Bank survey last week said political turmoil had dimmed Thailand's appeal to investors, with more than 60 percent saying uncertainty over government policies had weakened the investment climate in 2007.