Lebanon's cabinet has approved the country's first budget since 2005, state news agency NNA reported on Monday, citing Information Minister Melhem Riachy and adding that further details would be released on Thursday.

The budget, which Riachy said envisages a reduction in the deficit, will not become law until it is also approved by the country's parliament. He said the cabinet approved the budget unanimously. 

The government's failure to pass a budget for 12 years has been a result of crippling political differences between major power blocs after the assassination of former prime minister Rafiq al-Hariri.

Parliament's election of Michel Aoun as president in October ended a 2-1/2-year power vacuum and led to the formation of a new government in December with Hariri's son Saad al-Hariri as prime minister.

Lebanon's economy, already hampered by low investment and poor infrastructure, has been battered since 2011 by the war in Syria, its dominant neighbour, which has brought more than a million refugees, increasing the population by about a third.

An International Monetary Fund report warned in January that the country needed a "sustained and balanced fiscal adjustment", without which its public debt burden, already one of the highest in the world, would continue to rise.

Hariri said in an emailed statement that cabinet discussions that took place on Monday included a deficit target that was "substantially reduced".

The government has also been examining in a separate measure proposals for a rise in public sector pay scales, expected to cost about $800 million, and a range of new taxes.

Source :Times Of Oman