UPDATE 1-Lebanon commits to quick reforms, warns could be painful - draft policy statement

Lebanon is committed to carrying out fast and effective reforms that could be "difficult and painful" to avoid a worsening of economic, financial and social conditions, according to a draft government policy statement seen by Reuters on Wednesday.

The government formed last week is also committed to bringing down the debt-to-GDP ratio by boosting the size of the economy and reducing the budget deficit, the draft policy statement said. The statement drawn up by a committee of ministers this week sets the main policy objectives of Prime Minister Saad al-Hariri's government and will be put to a vote of confidence in parliament next week.

Lebanon has one of the highest debt-to-GDP ratios in the world, at around 150 percent. As of the 2019 budget, the government is committed to a "financial correction" equal to at least one percent of GDP a year over five years, the draft policy statement said.

This would achieved by boosting revenues and cutting spending, starting with transfers to the state-run power company, it said. Lebanon would also continue the policy of exchange rate stability that is a priority for "social and economic stability", it said.

The government would also award licences for offshore energy blocks in a second round of tenders by the end of 2019, it added. (Reporting by Laila Bassam; Writing by Tom Perry/Ellen Francis; Editing by Hugh Lawson, William Maclean)