ISLAMABAD: Pakistan Prime Minister Imran Khan removed his finance minister on Monday as part of a government shake-up aimed at bringing in policies to control “rising inflation”, the information minister said.
The removal – the second of a finance minister in the 2-1/2 years of Khan’s tenure that witnessed GDP growth falling from 5.6% to -0.4% – coincides with the restart of a $6 billion IMF bailout programme that had been suspended for one year over questions about fiscal and revenue reforms.
Pakistan is also preparing to float Eurobonds worth around $2 billion to raise capital from international markets about two months before presenting a budget amid historical remittances and good debt inflows helping to shore up foreign reserves to assist its currency’s recovery against the dollar.
“There has been rising inflation, and the prime minister thinks that we need to bring in a fresh team which could devise pro-poor policies,” information minister Shibli Faraz told Dunya News TV.
Faraz said the minister for industries and production Hammad Azhar would replace Abdul Hafeez Shaikh.
“This wasn’t expected as investors thought that after the IMF deal Mr Shaikh will present the next budget also,” said analyst Mohammed Sohail of Topline Securities.
“Market will take it negatively in the short run,” he said.
The central bank on March 19 kept its policy rate at 7% for a 10th consecutive month to support economic recovery while keeping inflation expectations well-anchored and maintaining financial stability. It also revised the growth rate to 2% from 3% for the current fiscal year.
The South Asian nation recorded 8.7% CPI Y/Y in February.
“I am honoured to be entrusted with the additional charge of finance by the Prime Minister,” Azhar said on Twitter. “The world is witnessing supply chain disruptions & rise in food prices. We shall endeavour to protect our ppl from these shocks.”
Shaikh had lost a parliamentary election earlier this month that was mandatory for him to keep the office of the finance minister constitutionally. However, he could have stayed in office until June 10.