(Adds details) GABORONE, Aug 30 (Reuters) - Botswana now expects economic growth of 9.7% in 2021, compared with the 8.8% forecast in February, helped by higher diamond sales and a recent rebasing of GDP accounts, Finance Minister Peggy Serame told Reuters on Monday. She added the 2021 budget deficit was expected to widen to 3.9% from the 2.8% seen in February. In July, Botswana revised its real GDP accounts base year to 2016 from 2006, seeking to improve the accuracy of its measurement of economic growth. Due to the rebasing, last year’s economic contraction is now much deeper - at 8.5% - rather than the 7.9% originally reported, while nominal GDP is now 4.6% lower at 172,552 million pula ($15.5 billion). “The larger than forecast contraction in 2020 is, however, expected to be offset by an improvement in growth in 2021 which has now been revised upwards to 9.7 percent growth for the year,” Serame said in response to emailed questions. She said the upward revision was due to a combination of technical changes resulting from the rebasing of GDP by Statistics Botswana in July 2021, alongside the strong performance of the diamond sector in the first half of 2021. After falling by 30% in 2020, sales of rough diamonds by Debswana Diamond Company, a joint venture between the government and Anglo American’s De Beers, jumped 41% in the first half of 2021, fuelled by demand from major markets the United States and China. Serame said the government was in advanced talks for a $130 million budget support loan from the African Development Bank, part of plans to tap external and domestic borrowing sources to help fund its budget deficit. $1 = 11.1359 pulas Reporting by Brian Benza Writing by Wendell Roelf Editing by Alison Williams and Mark Potter Our Standards: The Thomson Reuters Trust Principles.