Gabon is Africa’s fourth-largest oil producer.
It has suffered from the 50% drop in crude prices since 2014 and its struggle to diversify the economy away from oil.
The government said in a statement late on Thursday that 2018 spending would total $4.85bn.
It was forced to cut its budget for 2017 to 2.48 trillion CFA franc because of low oil prices.
Buffeted by political instability
The budget proposal now heads to parliament for debate and adoption.
The International Monetary Fund predicted in August that Gabon’s economy would grow at just 1% in 2017, down from 2.1% last year, due to weakness in the oil sector and a recession in the commercial and service sectors.
International majors Total and Shell are the main investors in the oil sector, which produces about 220,000 barrels per day.
Gabon was also buffeted by political instability last year following a disputed presidential election and many in the country complain that the oil wealth is not distributed, leaving most poor and out of work.