Pakistan has continuously suffered from a trade deficit since 1973. The balance of trade is calculated as the value of imports minus the value of exports. A trade deficit occurs when a country imports more goods than it exports, while a trade surplus happens when exports exceed imports. Factors that affect Pakistan's balance of trade include production costs, currency exchange rates, trade restrictions and barriers, availability of foreign exchange, and consumption and savings levels. Improving the trade balance requires depreciating the currency, taxing capital inflows, consuming less and saving more.