KARACHI - Trade deficit of Pakistan has marginally narrowed by $3.873 billion in 2008-09 and closed at $17.040 billion as compared to $20.913 billion deficit in last fiscal year. During July-June 2008-2009, the YoY growth in trade deficit has decreased by 18.52 per cent. This improvement is attributed to significant decline in imports on the back of import compression measures taken by government, massive decrease in international prices of oil and commodity and depreciation in the rupee value that discourage imports during the year under analysis. From July 2008 to June 2009, Pakistans total exports fell to $17.781 billion, depicting a negative growth of 6.67pc as against $19.052 billion in previous fiscal year while imports contracted by 12.87 per cent, to $34.822 billion during the year under review from $39.965 billion in FY08. The Federal Bureau of Statistics (FBS) on Monday released Foreign Trade statistics for the entire financial year 2008-09 which revealed that the month-on-month based balance of trade of the country improved by 14.83 per cent, to $1.801 billion in the month of May 2009 from $2.115 billion in May 2008. Pakistans total exports squeezed to $1.537 billion in June this year, showing a sharp decline of 19.43 per cent in comparison with June last year. Imports posted a negative growth of 17.01 per cent as compared to $3.339 billion in FY09 as against $4.023 billion of preceding fiscal year. In the Federal budget 2008-09, the Federal government has taken some tough measures to reduce trade gap during current financial year. The government has imposed further regulatory duties and taxes on luxurious and non-essential items. For instance, Withholding Tax on the import of raw material used in consumer items has been increased in this budget. Further the Ministry of Commerce is set to announce the new trade policy by the end of this month. The upcoming policy is expected to improve the current account by curtailing import growth and accelerating exports. However, the trend in the growth of oil import bill could see upward movement in the coming months in anticipation of rising oil and other commodities prices in international market. Despite showing this serious apprehension, the sustainable improvement in the trade account can be achieved only through increasing exports by product and market diversification with gains in productivity as the advanced economies are getting towards recovery and improvement. Increase in market diversification requires quality products with the good name of country and congenial environment to buyers of Pakistani products to visit production venues and observe the process, investment, expertise, spending in research and development. Given the expectation that the decline in imports will be much larger than the fall in exports, the trade deficit is expected to sustain to decline in the coming months of FY10.