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Trade Minister Mari Elka Pangestu predicted on Thursday that exports this year could increase by more than the government’s earlier forecast of growth of 7 percent to 8.5 percent.

“Seeing January’s impressive total of $11.6 billion of exports, I am confident that this year’s exports will grow by 8.5 percent and possibly more,” she said.

Exports in January came in 59 percent above those during the same month a year earlier.

In February, the government forecast that exports in 2010 would be 7 percent to 8.5 percent ahead of the $116.5 billion of total exports recorded in 2009.

The improving global economic conditions actually pose a challenge to the country as it has to make sure it improves its competitiveness so it does not fall behind its rivals, Mari said.

Deputy Trade Minister Mahendra Siregar said January’s export figures were partially the result of increased demand created by the implementation of the Asean-China Free Trade Agreement on Jan. 1.

Under the FTA, tariffs have been reduced or eliminated on thousands of product categories, with more tariff cuts scheduled to be introduced in 2012, 2018 and 2020.

“January’s export total is the highest ever recorded for January, so we are optimistic,” Mahendra said, adding that exports have been increasing at an average rate of 9.66 percent per year since 2005.

Fauzi Ichsan, the chief economist at Standard Chartered Bank Indonesia, also said it was likely the country would exceed the government’s 8.5 percent export-growth target this year, particularly as the price of crude oil was likely to increase.