Tyre makers seem to bend the rules when it comes to keeping a standard on sizes.
My 18 inch Kenda's, clock on at over 19 inches.
Some makers seem to measure the diameter of the case, while others measure to the outside of the tread.
As stated by Demon, you can gain back by replacing the front sprocket with a smaller one.
If you do replace the sprocket, you will need to replace the chain and rear sprocket as well, as old and new do not marry well.