UPDATE 1-Brazil's Bolsonaro gives thumbs up as economy avoids recession

(Adds Economy Ministry comment, details of report, byline)

BRASILIA, Aug 29 (Reuters) - Brazil’s economy is on the right path and growing again, President Jair Bolsonaro said on Thursday, after government data showed surprisingly strong second-quarter growth that kept it from falling back into recession.

The economy expanded 0.4% in the April-June period despite a steep 1.0% fall in government spending, according to the official stats agency IBGE.

Bolsonaro tweeted that the economy was climbing out of the hole dug for it by the previous government, adding, “We’re on the right path!”

The Economy Ministry said the outlook was brighter than a few months ago.

“The ongoing fiscal adjustment, low productivity, and global uncertainty still suggest there is a long way to go,” according to a ministry presentation released on Thursday.

“But it is important to stress that despite these challenges, Brazil’s situation today is more favorable than it was a few months ago,” it said, citing the government’s drive to control spending and the deficit.

Assuming growth at second-quarter levels for the rest of the year, Brazil’s economy is on course to grow 0.6% this year over 2018, according to the presentation.

That would be significantly below the 1.1% growth in both 2017 and 2018, although the Economy Ministry’s official forecast is for 0.8% expansion this year. (Reporting by Jamie McGeever Editing by Chizu Nomiyama and Richard Chang)