The value of import letters if credit (L/Cs) opened by Saudi Arabian private sector buyers in the first half of 2009 fell by around one third compared with last year.

The decline underlines the severity of the global recession on economies in the Gulf states.

Sluggish demand

Import demand from Saudi Arabia's private sector buyers in the first half of 2009 fell by 34.7 per cent, according to data published by the central bank.

It says that dramatic falls in demand for building materials and motor vehicles were amongst the main reasons for the fall in L/C openings.

Sharp decline

According to the central bank, the value of new L/Cs opened by commercial banks for private sector imports amounted to just 61.19 billion Saudi riyals (SR61.19 billion) in the six months to 30 June.

In the same period in 2008, the kingdom's private sector importers opened L/Cs worth SR93.68 billion.

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