Beirut: Lebanon's Finance Ministry proposed a 2011 budget that would narrow the deficit to 8.6 per cent of projected gross domestic product.
The shortfall compares with a revised 8.9 per cent deficit for this year, according to the draft submitted by Finance Minister Raya Haffar Al Hassan.
The initial deficit forecast for this year was 10.7 per cent. Government spending will rise by 12.7 per cent to 20.6 trillion Lebanese pounds (Dh50.3 billion), while revenue is projected to increase 16 per cent to 15.1 trillion pounds, according to the proposal.
Once approved by the Cabinet, the proposals will be sent to parliament for discussion. The Cabinet on June 19 approved the draft budget for 2010, which has yet to be ratified by parliament. If approved, it would become the first budget to be ratified since 2005. Political disagreements, a month-long war with Israel and internal civil strife have stalled the budget.
Lebanon's economic growth will accelerate to five per cent next year from an initial forecast of 4.5 per cent in 2010, according to the draft budget. In May, the ministry predicted growth of four per cent next year.
Refinancing debt
The budget forecasts that inflation will slow to 2.8 per cent in 2011 from the International Monetary Fund's five percent estimate for this year. The IMF estimates inflation will be 3.4 percent in 2011.
Prime Minister Sa'ad Hariri's government has to finance public debt estimated to reach about 129 per cent of GDP from about 131 percent in 2010, according to the proposal.
