* GDP outlook below initial forecasts due crisis
* Imports falling faster than exports
* Budget deficit smaller than in 2008
HAVANA, Dec 20 (Reuters) - Cuba's economy will grow 1.4 percent this year, the government said on Sunday, falling short of official forecasts and marking one of the communist-run island's worst performances in several years.
The Cuban economy is suffering from financing problems that have been compounded by the global economic slowdown, which has sapped earnings from tourism and hit demand for key exports such as tobacco, nickel and petroleum derivatives.
The government originally estimated 2009 growth at 6 percent but later slashed its outlook to 1.7 percent.
"The Cuban economy will grow 1.4 percent, below the 6 percent that was initially planned on the basis of more favorable circumstances that didn't materialize," Economy Minister Marino Murillo said.
Cuba's economy grew by 4.3 percent in 2008.
In a speech to the year-end meeting of the country's National Assembly, Murillo also forecast a modest economic expansion of 1.9 percent in 2010.
He said exports of goods and services were on track to fall 22.9 percent, with imports seen slumping an even bigger 37.4 percent -- data that would indicate some success in the government's drive to reduce its hard currency expenses.
Meanwhile, officials said the country had reduced its budget deficit to 4.8 percent of gross domestic product (GDP) from 6.7 percent last year. The government's target for next year is for a budget deficit of 3.5 percent.
President Raul Castro, who has imposed some farming reforms in a boost to increase output and replace food imports, was expected to address the National Assembly later on Sunday. [ID:nN17158850]
Castro, 78, was sworn in as president early last year, replacing his ailing older brother Fidel, 83, who has not been seen in public since undergoing intestinal surgery in July 2006.
Cuba's government uses a formula for calculating gross domestic product that takes into account free and heavily subsidized social services. (Reporting by Marc Frank and Helen Popper, editing by Matthew Lewis)