The Cabinet of Ministers yesterday agreed to reduce the country's budget deficit in 2012 while maintaining a sound economic growth and a single digit inflation rate.

The 2012 Budget aims to keep the Economic Growth at least at 8 percent and inflation within a range of 6 to 7 percent. Budget Deficit is to be reduced to 6.2 percent from 6.8 percent of GDP. Total Debt target is to be reduced to 75 percent from the current 80 percent of GDP.

The President Mahinda Rajapaksa as Minister of Finance and Planning has submitted to the Cabinet a broad framework for the preparation of the Budget for the year 2012 based on the Medium Term Expenditure Framework of 2012- 2014.

Accordingly the Cabinet has granted approval for the General Treasury to proceed with the preparatory work of the Budget 2012 focusing on those economic goals.

The Cabinet has also decided that in line with the current economic policy, public investment should be maintained at least at 6 percent of the GDP.