Zurich, July 18 - Swiss retail sales soared in May, data showed on Tuesday, as shoppers in the country enjoyed the healthy growth pace of the economy, while the ZEW sentiment index showed output might continue to expand.
Retail sales rose at an inflation-adjusted 5.9 percent in May, their highest rate since April 2004, the Federal Statistics Office said, adding shops had seen turnover rising by a real 1.8 percent in the first five months of the year.
Separately, data showed the ZEW investor sentiment gauge for Switzerland rose to 24.5 in July from 22.6 in June, defying a bigger-than-expected drop in Germany and the euro zone and confirming the rosy outlook for the Swiss economy.
"The results continue to show the optimistic view of the survey participants regarding the economic prospects in Switzerland for the second half of 2006," Credit Suisse, which issues the indicator together with Germany's ZEW economic research institute, said in a note.
A recovery in the Swiss economy has been led by exports but recent data have shown the uptick is becoming more broad-based and the Swiss National Bank has steadily been raising interest rates to keep inflation at bay.
All sectors in retail showed annual increases in sales in May, the Federal Statistics Office said.
"Looking at the annual growth rate, we have only seen higher rates on three separate occasions over the last 10 years, so these are really good numbers," said Reto Huenerwadel, an economist at UBS.
But neither sets of data changed a widely-held view the central bank will continue to tighten policy by modest 25 basis point rate steps only at its next two interest rate meetings in September and December this year.
Inflation is still well below the SNB's 2 percent upper ceiling, coming in at 1.6 percent in June.
Producer and import price inflation -- a leading indicator for consumer price inflation -- for June due on Thursday will give clues of whether price pressures are heating up. Trade data for June are also due on Thursday.