The federal Cabinet in Pakistan has resigned to allow Prime Minister Yousuf Raza Gilani to form a smaller Cabinet as part of efforts to cut government spending.
Mr. Gilani made the announcement while chairing the last meeting of the outgoing Cabinet in Islamabad. He praised the performance of his Cabinet members.
"When we took over we found this country in very difficult circumstances," Gilani said. "The country was facing an economic melt down and terrorism in which doubts were expressed on the sustainability of Pakistan as a nation. We together successfully steered this nation towards a sustainable path of economic recovery by initiating both long-term and short-term policies."
Officials say the prime minister will soon announce the new, smaller Cabinet, but they would not state the number of its members.
Mr. Gilani's coalition government has maintained one of the largest Cabinets in the world at a time when Pakistan is struggling to revive its economy.
The size of the Cabinet has become the focus of criticism as the 50-plus ministers are seen as a burden on the national budget.
Critics say a smaller Cabinet will not make a significant contribution towards economic turnaround, but it may help improve the Pakistani government's credibility.
A loan program extended by the International Monetary Fund has propped up the economy, but the facility comes with more trouble for Prime Minister Gilani's shaky ruling coalition. The IMF program requires Pakistan to widen the tax net and withdraw subsidies to an already angry public.
Efforts to introduce vital economic reforms have also met stiff resistance from opposition parties who want the government to first streamline the finances by plugging loopholes in revenue collection and cutting expenditure.
The government says last summer's devastating floods in Pakistan have further strained the economy. The natural disaster is estimated to have caused about $10 billion worth of damages.