(Adds details, analysts comments)
By Bate Felix
BRUSSELS, March 23 (Reuters) - The euro zone had a wider than expected trade deficit in January as seasonally adjusted exports sank more than 10 percent from December, setting the currency area on course for a sharp drop in first-quarter GDP.
The unadjusted trade deficit in the 16 countries using the euro in January was 10.5 billion euros ($14.4 billion) against a downwardly revised gap of 1.7 billion euros in December, the Eurostat European Union statistics office said on Monday.
Economists polled by Reuters had on average expected a January trade deficit of 9 billion euros.
Seasonally adjusted exports fell 10.7 percent and imports by 7.3 percent in January, compared with December 2008.
On an unadjusted basis, imports sank 23 percent in January year-on-year while exports plunged 24 percent, Eurostat said.
"The 10.7 percent fall in month-on-month exports is pretty dire. We knew it was going to be weak, but that really is scary," said Capital Economics analyst Ben May, adding that the figures could mean a sharp fall in first-quarter GDP.
Economists have blamed falling imports on shrinking domestic demand as the euro zone sinks deeper into its first recession. Declining exports are seen as a result of falling demand caused by the global slowdown.
The euro zone's trade deficit last year with oil exporter Russia widened to 35.5 billion euros from 30.8 billion euros in 2007, the data showed. Against China, it expanded to 117.8 billion euros from 2007's 111.0 billion.
The trade surplus against the euro zone's biggest trading partner, Britain, fell to 55.4 billion euros in 2008 from 60.2 billion euros in 2007, while that with the United States dropped to 49.3 billion euros from 63.4 billion.
"Overall the trade balance is worsening. And it's getting to a level which is fairly close, or probably worse than it has ever been since the introduction of the euro, so since 1999," said Giada Giani, economist at Citigroup. (Editing by Dale Hudson)