Letter of credit (L/C) business in Saudi Arabia is expected to grow this year as import flows improve according to data released by the Saudi Arabian Monetary Agency (SAMA).

However, analysts are warning that regional unrest could stall anticipated growth in the Saudi economy.

Import growth

According to figures released by SAMA, the value of new L/Cs issued against imports in January was up 1.5 per cent compared with January 2010.

The value of L/Cs issued in the Kingdom varies widely during the year, but officials anticipate that more will be issued on the back of increased import flows.

Imports into Saudi Arabia rose by less than 1 per cent last year but are anticipated to increase more sharply during 2011.

Economic boost

The Saudi economy has been boosted over recent weeks by high oil prices and a US$35 billion state benefits scheme for citizens unveiled this year.

But some analysts are concerned that civil unrest in the Middle East could yet stall the Kingdom's economic progress.

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