A team from the International Monetary Fund (IMF) concluded its visit to Pakistan on Tuesday, the government said, adding that “substantive progress” had been made but talks will continue on a possible bailout.
The IMF mission held “extensive talks” with Pakistani officials during the visit, which began on Nov. 7, the finance ministry said in a statement.
“Substantive progress has been made by the government of Pakistan and the IMF Mission towards developing a common understanding on the policy and structural reforms framework for the prospective IMF program,” the statement continued. “The positive engagement with the IMF will continue over the coming weeks to finalize the program with the Fund.”
Pakistan—which has gone to the IMF repeatedly since the late 1980s—is facing a widening 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-publicized 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 U.S.—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.