Pakistan appoints fourth finance minister in two years in shake-up of economic team

Mr Shaukat Tarin takes on the job just weeks before the annual budget is due.
Mr Shaukat Tarin takes on the job just weeks before the annual budget is due.PHOTO: ST FILE

ISLAMABAD (REUTERS) - Pakistan appointed Mr Shaukat Tarin as its fourth finance minister in two years on Friday (April 16), part of a shake-up of the government's economic team as it enters a key period of budget-making and implementation of IMF reforms.

Mr Tarin, a former banker, held the finance minister's portfolio for about a year in a previous government led by the Pakistan People's Party (PPP), now in opposition to the ruling party of Prime Minister Imran Khan.

His predecessor, Mr Hammad Azhar, had been in the role for less than three weeks.

Mr Khan also shuffled other key economy-related ministries, his office said, including the economic affairs and power portfolios.

Mr Tarin takes on the job as just weeks before the annual budget is due, with economists saying Pakistan is likely to record its biggest ever deficit as a result of uncertain government policies aggravated by coronavirus pandemic.

The third wave of Covid-19 currently sweeping through the country will create additional uncertainty in areas such as revenue collection, making the budget estimates more difficult.

Pakistan expects its economy to grow 3 per cent in the current fiscal year which ends June 30, having revised its forecast higher from a little above 2 per cent. Last year, GDP contracted by 0.4 per cent.

The International Monetary Fund projects 2020/2021 GDP growth of 1.5 per cent and the World Bank see a 1.3 per cent expansion.

IMF country chief Ernesto Ramirez Rigo said on April 8 that good data in January and February had suggested growth could beat its forecast but that the pandemic's third wave meant"perhaps we might ... need to dampen a bit our expectations".

Pakistan will also need to adjust its annual budget, he said.

The IMF approved a US$500 million (S$666 million) disbursement to Pakistan last month for budget support after competing delayed reviews of a US$6 billion Extended Fund Facility programme.

GDP growth was 5.8 per cent when Mr Khan took power in 2018.

Some US$2.5 billion of borrowing in international bond market and historically high remittances have recently given some economic breathing space.