Saudi Arabian import financing posted a record first half as economic growth in the world’s biggest oil exporter spurs demand for goods including building materials and cars.

The value of letters of credit signed by lenders in the largest Arab economy surged 24% in the first six months of 2012 to 107bn riyals ($ 29bn), the most on record for the period, according to the most-recent central bank data. That compares with 10% growth in the same period last year.

Saudi businesses are taking out bank loans at the fastest pace in three years and pursuing record bond sales as they take part in the government’s $ 514bn plan to build housing, infrastructure and industry. This is stimulating the non-oil economy, which is poised to grow 6.5% this year, the second-fastest pace in the six-nation Gulf Cooperation Council after Qatar, according to the International Monetary Fund.

“Imports are being driven by both consumption and investment-related goods, reflecting the broad-based drivers of Saudi’s non-oil economy,” Monica Malik, Dubai-based chief economist at EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank, said by phone on Sunday.

Supported by oil prices that have averaged $ 96 a barrel so far this year in New York, state and private investors in Saudi Arabia are importing more. Saudi Arabia’s $ 597bn economy, may grow 5% this year, including the oil industry, the second-fastest pace since 2005 according to the median forecast of 12 economists surveyed by Bloomberg in July.

The pickup has prompted banks to accelerate the pace of lending and spurred higher borrowing costs. Loans to private businesses expanded 13.9% in June, the fastest pace since March 2009, central bank data show.

The three-month Saudi interbank offered rate, known as Saibor and the benchmark used by banks to price loans, has added 17 basis points this year to 0.95250% yesterday, the highest since April 2009, data compiled by Bloomberg show. That has widened the spread with the equivalent US rate to 53 basis points on Friday compared with 20 at the end of 2011.

The Saudi riyal weakened to 3.7501 a dollar in the 12-month forwards market yesterday, the lowest level since April, the data show.

Growing import financing this year “is a testament to a story of positive domestic demand,” Dubai-based HSBC Holdings Plc senior economist Liz Martins said by phone on Sunday.

Cargo traffic through the Jeddah Islamic Port on the Red Sea, the port handling more than a third of the kingdom’s traffic, surged 31% in the first half, the fastest pace in at least seven years, according to data of the Saudi Ports Authority.

Letters of credit to finance building material imports gained 46% in the first six months to 13.4bn riyals, central bank data show. Import financing for machinery climbed 15% to 15.9bn riyals.

The data also show a trend toward greater consumption by the nation’s 28mn people. Letters of credit against the import of automobiles jumped 24% in the period, while those for foodstuffs surged 61%.

“We see a wide number of direct private consumption drivers, with government policy focusing on job creation and wealth distribution,” Malik of EFG-Hermes said.

Consumer demand hasn’t stoked inflation, which eased to 4% in July, the lowest since October 2009, according to data compiled by Bloomberg. “The fact that we don’t have inflationary pressures, however, suggests that there are limitations to the story of strong private consumption,” Martins said.

HSBC’s monthly Purchasing Managers Index for the kingdom, fell for a second month to 58 in July, although this level “firmly in expansionary territory,” HSBC said in a report this month.

Saudi Arabia’s spending plan includes more than $ 60bn to build a logistics hub, and improve airports and roads. To finance the plans, state and private businesses have turned to the debt markets, selling $ 8bn of bonds this year, the most on record according to data compiled by Bloomberg. The biggest issue was a 15bn-riyal sale of Islamic bonds by state-run General Authority for Civil Aviation in January to fund an airport expansion.

Building homes is also a priority to stem an increase in real-estate prices, with the government approving its first-ever mortgage law in July. Shares of Riyadh-based Dar Al Arkan Real Estate Development Co soared 35% this year, outpacing the benchmark Tadawul All Share Index’s 11% advance.