Indonesia's exports plunged 20.72 percent (y/y) to USD $10.50 billion in January 2016, the weakest export figure since September 2009 and the 16th straight month of declining exports. These weak data are the result of low commodity prices and weak global demand. The country's January exports plunged more than expected. Analysts had been expecting a 15.4 percent (y/y) decline.

Meanwhile, Indonesia's imports plunged 17.15 percent (y/y) to USD $10.45 billion in the first month of 2016, the 16th straight month of declining imports, reflecting weak domestic consumption in Southeast Asia's largest economy. Analysts expected to see a decline of 8.14 percent (y/y). As such import realization in January was much weaker than expected. While imports of capital goods and raw materials declined, imports of consumer goods rose (the only positive sign).

The weak export and import figures in January give rise to concern that Indonesia's economic growth in 2016 will have trouble to surpass the 5.0 percent (y/y) mark (the government targets a 5.3 percent y/y growth rate this year). Export data are expected to remain subdued throughout the year as commodity prices (Indonesia's main export products) remain persistently low. Import figures, however, should start to rebound as the government is eager to push for infrastructure development (which require imports). Therefore, the January import data were very disappointing.

Trade Balance Indonesia: