ISLAMABAD  -   The trade deficit of the country has contracted by 5 percent to $16.8 billion in July-December (2018-19) against the deficit of $17.7 billion during same period of the year 2017-18.

Government’s policy measures have resulted in shrinking of trade deficit , decline in imports and increase in exports which augurs well for overall balance of payment of the country, said a statement issued by finance ministry here on Thursday.

The overall imports from July-December 2018 have shrunk by over 2 percent from $28.7 billion in July–December 2017 to $28 billion in July–December 2018.

This trend is even more pronounced in respect of imports under Regulatory Duty (RD) regime, where the import value has declined from $ 5.2 billion in July–December 2017 to $ 4.4 billion in July–December 2018, showing a contraction of 16 percent (effective on 1994 tariff lines).

The trade balance in December 2018 compared to December 2017 also shrunk by 19 percent from $ 2.9 Billion to $ 2.3 Billion.

In December 2018, the imports in US$ term declined to $4.3 billion compared to $ 4.9 billion in December 2017 which reflects an import compression of over 12 percent.

This trend is even more pronounced in December 2018 in respect of imports under RD regime (effective on 1994 tariff lines) wherein the imports declined from $896 million in December 2017 to $ 691 million in December 2018 (-23 percent).

Data indicates that the import compression measures taken in the supplementary Finance Act, 2018 have firmly taken hold and are now effectively curtailing imports as per policy regime of the government. The data on import of containerized cargo also has shrunk by 9 percent.

The exports have also shown a growth of 5.5 percent in December 2018 compared to December 2017.

In the first six months from July-December 2018, exports have shown a growth of over 2 percent compared to the same period last year.