Consumer demand is alive and well in South Africa.

There has been some speculation in recent weeks in the international financial press that South Africa's (SA) consumer boom--well illustrated by the chart above sketching out the country's retail sales--is not sustainable.

Domestic demand is indeed driving economic growth. Reuters recently reported from Johannesburg that domestic demand rose from 3.5 percent in the first quarter to 4.8 percent in the second quarter.

Much of the speculation stems from a technical analysis of the country's commodity driven currency and a the beginning of a shift in world economic power that includes Asia in the balance.

These arcane speculations fail to take into account the deeply fundamental nature of consumer demand. The chart above--using data developed by Statistics South Africa--traces retail sales over a period of eight years at constant prices.

During the period, the South African economy has experienced some serious gyrations. Notably, in 2002 inflation spiked to 9.2 percent. GDP the following year dropped to a gain of 1.9 percent. In 1998, where the chart on page 1 begins, GDP was only 0.8 percent.

In spite of these gyrations, the most interesting thing about South Africa's retail sales is the remarkable regularity it demonstrates. There are no sharp departures from the established pattern.

The steady quality of South Africa's retail sales spans also a nearly wild period in the global economy. Oil prices have been up and down, the collapse of the former Soviet Union introduced its own anomalies into the global system, natural disasters aplenty uprooted populations and caused untold misery in many parts of the world, and the emergence of China as a world economic power, often cited as a disruptive force in the global economy, appears to be very un-dragon-like indeed.

Of course the world economy will undergo a...

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