UPDATE 1-Sudan's President Bashir dissolves government
No new appointments were immediately announced.
Bashir said the measure was necessary to solve "the state of distress and frustration faced by the country during the last period", the statement said.
Sudan's economy has been struggling since the south seceded in 2011, taking with it three-quarters of oil output and depriving Khartoum of a crucial source of foreign currency.
The crisis has deepened over the past year as a black market for U.S. dollars has effectively replaced the formal banking system since the Sudanese pound was devalued, making it more difficult to import essential supplies such as wheat.
A doubling of the price of bread in January, after the government eliminated subsidies, triggered demonstrations.