* Estonian Finance Ministry cuts 2009 forecast
* GDP to drop 14.5 pct, worse than 8.5 pct forecast before
* Says more budget cuts needed
* PM determined to stay on euro course
(Adds quotes, background)
TALLINN, Aug 27 (Reuters) - Estonia's Finance Ministry on Thursday cut its forecast for the economy this year to a drop in gross domestic product of 14.5 percent and saw the need for more budget cuts to keep on target for euro adoption in 2011.
The deepening recession has caused revenues to tumble, making it difficult to keep the budget deficit under 3 percent of GDP, the maximum allowed for euro adoption under the Maastricht criteria.
Given the worsening outlook this year, the ministry saw the 2009 deficit ranging between 3.2 and 4.2 percent of GDP meaning more budget cuts were needed.
"The government sector deficit will on the border of the Maastricht criterion. In addition to the already made decisions for 2009, improvements to the budget of 2.5 billion kroons will need to be found," the ministry said in a statement.
The ministry's previous forecast for 2009 GDP, made in March, was for a GDP drop this year of 8.5 percent.
For 2010, it saw GDP dropping 2 percent, slightly better than the 2.5 percent decline expected before. It forecast consumer prices would fall 0.1 percent this year, versus the previous forecast of consumer price inflation of 0.4 percent.
Prime Minister Andrus Ansip was determined to keep to the euro goal.
"I will confirm again: we will hold to the euro course, we have a plan and based on today's situation, I indeed believe that we will join the euro on Jan 1, 2011," he told reporters after a government meeting. (Reporting by David Mardiste, editing by Mike Peacock/Toby Chopra)