BANGKOK (Reuters) - Thai junta leader Prayuth Chan-ocha, stressing that the military had a "limited time" in power before a return to civilian rule, submitted a draft fiscal 2015 Budget on Monday, with defence and education receiving hefty increases.

The military seized power in May after months of street demonstrations that led to the ouster of Prime Minister Yingluck Shinawatra.

The Ministry of Education was allocated 498.16 billion baht (S$19.4 billion), a 3.2 per cent increase from last year's budget and 19.5 per cent of the total budget allocations. General Prayuth has called for education reforms as part of his plans to reshape the country and restore political stability.

Defence spending, which typically increases in Thailand after a coup, grew 5 per cent from last year's allocation to 193.07 billion baht. "If we don't increase the budget and purchase new weapons, then nobody will fear us," Gen Prayuth told reporters.

The 2.58 trillion baht draft budget, up around 2 per cent from 2014, was submitted to the military-dominated National Legislative Assembly and will be considered by ad-hoc committees and adopted in the coming weeks. "The NCPO wants every ministry to put the budget to the best use possible because we have a limited time in power," Gen Prayuth said, referring to the National Council for Peace and Order, as the junta is formally known.

The economy may expand 3.5 per cent to 4.5 per cent next year, he added, as the political situation stabilises.

The National Economic and Social Development Board, which compiles gross domestic product data, on Monday trimmed its 2014 full-year growth forecast to 1.5 percent-2.0 per cent from a 1.5 per cent-2.5 per cent range.

Thailand avoided recession in the second quarter, the state planning agency said on Monday, but questions remain about the pace and depth of growth.

The board said it expected to see steady economic recovery in the second half of the year.

Gen Prayuth, who led the May 22 coup, will likely become prime minister in coming days, according to legislature members. He has outlined a three-phase plan of reconciliation, formation of a government and elections in 2015.

"I hope that in 2015 the country will come into its own," Gen Prayuth said. "We seized power in order to improve confidence in the country."

Since taking power, the junta has made delayed payments to rice farmers, capped fuel prices and made a point of reassuring foreign investors that Thailand will return to democracy within a year. It has also approved urgent infrastructure projects.

The moves appear to have helped consumer confidence which rose to the highest in 11 months in July, data this month showed.