Andy Mukherjee is a Bloomberg Gadfly columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.

For three years, Thai consumers sat at home and nursed a debt hangover. That they're starting to go shopping again for things like secondhand bikes, restaurant meals and energy drinks is both encouraging and just as clearly visible in company earnings and stock prices as in Monday's GDP announcement.

Take Group Lease. The Bangkok-based motorcycle financier earned a record 256.5 million baht ($7.4 million) in the second quarter. While a lot of that profit growth came from smaller markets such as Cambodia and Laos, the company's Thai customers also paid their installments more regularly, leading to a 26 percent reduction in the company's allowance for bad debt from a year earlier.

At the same time, Group Lease's loss on repossessed motorcycles has shrunk because the market value of pre-loved bikes has improved. The Thai consumer credit cycle looks to be decisively on the mend.

Through the Worst
Thai motorcycle financier Group Lease's provisions for bad bike loans have stabilized
Source: Bloomberg

Private spending jumped by 3.8 percent in the June quarter, its best year-on-year performance since early 2013, when the pro-consumption policies of Prime Minister Yingluck Shinawatra's civilian government were pumping up the economy, the currency and the stock market. By the time she was deposed via a military coup in May 2014, that optimism had long vanished.

With the military junta boosting government spending, and hopes of fresh elections rekindled earlier this month, a recovery in consumer confidence is under way.

Thai stocks, Asia's best-performing so far this year, have been highlighting the change in sentiment for some time.

Over the past three months, analysts have more than doubled their consensus third-quarter earnings estimates for Sizzler, Burger King and Swensen's franchisee Minor International, whose Thai restaurants are witnessing double-digit same-store sales growth, according to Krungsri Securities.

Timely Pick-Me-Up
Energy-drink maker Carabao Group's Thai sales are growing at their fastest pace in a year
Source: Bloomberg

On Monday, Carabao Group reported a solid 12 percent jump in Thai sales from the previous quarter. This year's 77 percent gain in its shares puts the energy-drink maker atop the country's best performing 50 stocks.

Will the revival last? At almost 72 percent of GDP, Thai households are still carrying a large debt load.

Watch That Weight
The household debt burden in Thailand is greater than Malaysia, which has a higher per capita income
Source: Bank for International Settlements

But with interest rates hovering close to a record low, and GDP growth outpacing expectations, consumers have a chance to pay down their obligations.

The spending craze of 2013, when tax rebates prompted families to buy as many as five cars, led to a massive leverage-induced headache. After three years of detox, the mood is beginning to lift. As long as the kingdom's crucial tourism economy isn't derailed by the recent bomb attacks, the Thai consumer might feel emboldened to go out more often.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Andy Mukherjee in Singapore at

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