GABORONE - Botswana's government now estimates it will record a budget deficit of 3.4% of gross domestic product (GDP) in the current 2022/23 fiscal year, from a February estimate of 3.2%/GDP, a finance ministry document seen by Reuters on Friday showed.

The budget strategy paper said the wider projected deficit reflected increased spending on public servants' salaries and pensions, as well as a relief package to cushion the impact of inflation on citizens.

The diamond-rich southern African country now sees its 2023/24 budget deficit narrowing to 0.1% of GDP and 2022 economic growth of 4.2% compared to 4.3% predicted in February.

"In 2023 we forecast a near-balanced budget... supported by higher prices and strong demand for diamonds, as well as fiscal consolidation adjustments," the strategy paper said.

(Reporting by Brian Benza; Writing by Bhargav Acharya; Editing by Alexander Winning)