Jul 2, 2008

Global food crisis to hit finances of India, Pak

The soaring global food prices will adversely impact government finances in countries like India and Pakistan and may result in bloating of their deficits by over five per cent of the GDP, according to a Standard & Poors (S&P) report.

India, Pakistan and Egypt would be hardest hit by the rise in food costs, with a general government deficits of 5.9 per cent, 6.5 per cent, and 6.9 per cent of GDP respectively, projected for 2008, says a S&P report. India, Pakistan and Sri Lanka, having revenue at less than 20 per cent of their GDP, have put these economies in precarious position of large deficits and narrow underlying revenue bases, the report added.

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