By Michele Kambas
NICOSIA, Jan 9 (Reuters) - Cyprus cut its 2009 economic growth forecast to 2.1 percent from 3.0 percent on Friday, worried at the impact of global financial turmoil on tourism and key trading partners.
The finance ministry said it was also expecting to see a fiscal deficit of between 0.8 and 0.6 percent this year, the first time the euro zone member has turned in a shortfall since 2006.
Its surplus was 1.0 percent of gross domestic product in 2008.
The island, which adopted the euro currency a year ago, is likely to see fewer tourists from its key market, Britain, while the crisis has also affected Russia, a key investment partner.
"The economic crisis is getting worse, but we still believe we will have very satisfactory rates of growth," said Finance Minister Charilaos Stavrakis.
"Our aim is to have the highest rate of economic growth in the euro zone," he said.
The 2.1 percent growth rate is more in tune with Central Bank staff projections issued in November of 2.0 percent growth in 2009.
The Finance Ministry projection is the third cut in forecasts since September, which then started out at 3.7 percent, then at 3.0 percent in October.
Stavrakis said the new growth forecast was a central projection, and a more optimistic scenario put growth at 2.6 percent, should projections of a downturn in tourism not materialise.
Tourism represents about 11 percent of Cyprus's 15.7 billion euro economy. The tourism industry itself expects a 15 to 20 percent drop in bookings this year.
A downturn in consumer confidence, which dropped sharply in November and December, was also expected to slow growth in the consumer-driven economy and impact tax revenues of the state, Stavrakis said.
"The good news is that inflation will be lower, from an initial forecast of 2.5 percent we now expect it to fall to 2.0 percent," Stavrakis said.
(Editing by Jason Neely)