Retail sales surge to 11.5% in May

We expect continued strong retail sales growth of 11.5% y/y for May. Ex autos, we expect that retail sales grew 12% y/y. The robust economy – the unemployment rate fell to a three-year low of 1.9% in Q1-2011 – likely supported domestic consumption. 

Moreover, wages are rising strongly, with Q1 average nominal monthly wages rising 8.5% y/y. Tourist arrivals also remained strong in May, up 10.6% y/y. Robust spending was further underpinned by creditcard billing, which rose 18.3% y/y. On the downside, the fall in the number of Certificates of Entitlement for vehicles probably continued to undermine motor-vehicle sales, although the rise in CoE prices likely played its part in mitigating the fall in overall vehicle sales receipts.