Yemen\'s cabinet on Tuesday approved a draft budget for 2012 projecting a deficit of 561 billion rials ($2.6 billion), on revenue of 2.1 trillion rials and expenditure of 2.7 trillion rials. The impoverished Arabian Peninsula state has seen a year of violent political turmoil that led President Ali Abdullah Saleh to quit office last month after three decades, and seeks billions of dollars in financial assistance to meet immediate fiscal needs. The state news agency Saba said the draft budget includes 65 billion rials for unpaid wage increases to public sector employees dating to 2005-2010 and 21 billion rials for increases that had been slated for 2011. The budget now awaits approval in parliament. Yemen has been operating with last year’s budget in the first quarter of 2012, and is scrambling for sources of revenue after political unrest has hit the modest oil exports that are a main source of foreign currency and fund imports of staple foodstuffs. The country’s planning minister last month told Reuters the current deficit was in excess of 10 percent of expenditure, and that $1.8 billion was needed immediately to prop up the currency. The rial has strengthened to about 215 to the dollar in exchange shops on Tuesday, from about 220 before the Feb. 21 vote that made President Abd-Rabbu Mansour Hadi the head of state. An conference of potential donors including Yemen’s wealthier Gulf neighbours, who crafted the power transfer deal under which Hadi took office, and the United States is expected to take place in Saudi Arabia next month. ($1 = 215 Yemeni rials) (Reporting by Josef Logan; Editing by Martin Dokoupil)