According to a declaration issued by the IMF after Pakistan extended talks after the two sides failed to agree on the terms of a bailout package, Pakistan agreed to decrease losses.
The declaration further stated that Islamabad agreed to protect the social sector and the Pakistan Tehreek-e-Insaf-led (PTI) government also agreed to increase transparency.
“The dialogues with Pakistan will continue for the next few weeks,” the declaration added.
Earlier, Pakistan extended talks with the International Monetary Fund (IMF) after the two sides failed to agree on the terms of a bailout package, a finance ministry official said on Tuesday, with a final deal now expected by mid-January.
Pakistan is negotiating its second IMF bailout since 2013 and talks were expected to conclude this month during a visit by an IMF delegation to Islamabad.
Finance ministry spokesman Noor Ahmed said there were still some issues to be ironed out. “We have covered a lot of areas in terms of convergence of views,” Ahmed said. “But there is some more distance to be covered and that’s not much. Another 20 percent of distance has to be covered.”
Ahmed said Pakistan will “stay engaged” with IMF officials to resolve the outstanding issues and “over the next two weeks we will bridge those gaps”. A final deal is expected to be signed off by mid-January.
Pakistan is seeking its 13th bailout since the late 1980s to deal with a current account deficit that threatens to trigger a balance of payments crisis.
But earlier this month finance minister Asad Umar said that unspecified assurances from China – combined with a pledge made by Saudi Arabia in October – meant that Pakistan s immediate fiscal woes were “over”.
Riyadh pledged $6 billion in funding and struck a 12-month deal for a balance of payments lifeline during a visit by Prime Minister Imran Khan. No further announcement has been made about any Chinese assistance.
Despite the pledges, Pakistan has said it will still seek broader IMF support for the government s long-term economic planning.
In his statement, Umar said the reforms discussed included “fiscal and monetary measures, corrective interventions for balance of payments sustainability, pro-poor spending, governance and development of a business-friendly environment”.
Khan s new government has been searching for ways to rally a struggling economy hit by inflation, and shore up Pakistan s dwindling foreign currency reserves.
The former cricketer has launched a highly-publicised austerity drive, including auctioning off government-owned luxury automobiles and buffaloes, in addition to seeking loans from “friendly countries” and making overtures to the IMF.
However, Islamabad has received billions of dollars in Chinese loans to finance ambitious infrastructure projects, and the US — one of the IMF s biggest donors — has raised fears that Pakistan could use any bailout money to repay its debts to Beijing.
Islamabad, which last received an IMF bailout in 2013 to the tune of $6.6 billion, has refuted these claims.