UPDATE 2-Lebanon delays final session on budget to Friday

Lebanon's government missed a self-imposed deadline to agree the 2019 draft budget on Wednesday and scheduled a final session for Friday, saying the deficit had been brought down slightly and might yet be reduced further.

Finance Minister Ali Hassan Khalil warned that every day the budget was not passed, there was "a cost to market confidence". The coalition cabinet has met daily to debate the budget, seen as a critical test of its will to enact reforms put off for years and now more pressing than ever, with leaders warning of catastrophe if there is no action.

Information Minister Jamal Jarrah said the projected deficit had been trimmed to 7.5% of gross domestic product (GDP) from the previously announced 7.6%. The gap was 11.2% last year. Lebanon has one of the world's heaviest public debt burdens, at 150% of GDP.

Final agreement has been complicated by a dispute between Khalil and Foreign Minister Gebran Bassil. Khalil said on Tuesday the budget was completed. But al-Akhbar newspaper quoted Bassil saying his party was not satisfied with the draft and a deficit of 7% could be "easily" achieved.

Jarrah denied reports of clashes in cabinet and said "a calm, objective and bold discussion" had taken place. On Wednesday, Khalil said on Twitter: "We want to get approval for this budget ... unfortunately it took us a long time but the priority is to pass the budget because each day has a cost to market confidence".

Prime Minister Saad al-Hariri had given a 48-hour window for discussion of new ideas tabled by ministers at Wednesday's session, Jarrah said. "The session on Friday will God willing be the final one," he said. "Why don't we give ourselves 48 hours? If the deficit can be brought down from 7.5% to 7.4% or 7.3%, then why not?" (Reporting by Ellen Francis/Tom Perry; Editing by Catherine Evans)