January exports fell a worse-than-expected 36%, the biggest annual decline in more than 22 years, as global demand for key commodities such as palm oil and rubber slumped, according to data released on Monday by the Central Bureau of Statistics.
"The fall in exports is actually in line with regional plunges. Exports in the regional economies in the likes of Singapore, Taiwan, and Malaysia have collapsed of late, shrinking by massive double digits in the range of 30-40%," said Enrico Tanuwidjaja, an economist at Singapore's OCBC Bank.
"Considering that Indonesia also serves such regional markets, the demand for raw and intermediate Indonesian goods is likely to be significantly reduced," he added.
The drop in exports to $7.15 billion in January, from $11.19 billion a year ago, was worse than the 30% decline forecast by analysts, and followed a drop of 20.6% in December.
Annual inflation in February was in line with expectations, falling to 8.60%, the lowest since March 2008, from 9.17% in January.