UPDATE 1-Lebanon budget deficit will be 8.3% of GDP or less -finance minister

Lebanon's finance minister said cabinet made "important" progress on Sunday in its debate over the draft budget which he said will have a deficit of 8.3% of GDP or less.

The deficit was 11.2% of gross domestic product (GDP) in 2018. Lebanon has one of the heaviest public debt burdens in the world at around 150% of GDP. "We reached a very encouraging and important result" in the late night cabinet meeting, Ali Hassan Khalil told reporters after it ended. "With some additional decisions ... we got to this deficit," he added.

Khalil said on Saturday the deficit would be below 9% of GDP and would include a saving of around 1 trillion Lebanese pounds ($663 million) in debt servicing costs. He told Reuters the government aimed to reduce debt servicing costs by issuing treasury bonds at an interest rate of 1%.

Lebanon's coalition cabinet has met almost daily to finalise a budget in an effort to get spending under control and rein in debt. President Michel Aoun has urged Lebanese to make sacrifices to rescue the country from financial crisis. Khalil tweeted that ministers would convene on Monday for a "final review" of the draft budget. (Reporting by Ellen Francis Editing by Chris Reese)