BEIRUT, Lebanon - Lebanon is working on a programme to cut its crippling budget deficit to zero in five years, as part of a reform agenda it is preparing for an upcoming debt aid conference, Central Bank Governor Riad Salameh said on Monday.

"We are presently in the process of preparing scenarios that can get the country on a five-year horizon to a zero deficit," he told Reuters in an interview.

Lebanon's debt burden is among the heaviest in the world at 183 percent of GDP and its servicing consumes much of the state's income. An international conference planned for late November or early December aims to attract cheaper loans that will help replace more expensive borrowing, but will probably be linked to an economic reform agenda.

Salameh said Lebanon's total debt would not exceed $37 billion by year-end compared to $33 billion at the end of 2004.

He forecast that growth would bounce back to 5-6 percent in 2006, depending on political stability, after the February killing of former Prime Minister Rafik al-Hariri shook the economy and hit growth this year.

"For next year, it will depend on the political environment, but what we can say is that Lebanon has preserved all its potential for growth between 5 and 6 percent," he said.

"That is essentially as there was no collapse after the assassination of Prime Minister Rafik al-Hariri, which allowed the economy to continue operating and to normally recuperate its activity as things calmed down."

Lebanon had forecast growth of around 5 percent for this year but slashed its expectations to below 2 percent following the killing. (Reuters)