MercoPress. South Atlantic News Agency

Bachelet announces stimuli program for the foundering Chilean economy

“These measures are designed to strengthen and invigorate public investment in the four months that remain in this year,” the president said.

President Michelle Bachelet presented on Monday a 500 million dollars emergency plan to try and rejuvenate Chile's slowing economy via investment promotion. She added that half of the anticipated funding will come from adjustments to the budget while the rest will come from greater structural income from a tax reform that Congress is expected to approve soon

“These measures are designed to strengthen and invigorate public investment in the four months that remain in this year,” the president said.

The Chilean economy is facing a greater-than-originally-predicted deceleration due to the drop in the price of its main export product, copper, and a significant decline in private investment.

Analysts have reviewed their projections and now calculate that economic growth will be about 2% in 2014, lower than calculated several months ago.

Bachelet said that the plan includes expanded and expedited infrastructure spending and already approved increases in the capitalization of state copper giant Codelco and publicly owned Banco Estado.

The additional funds for Codelco will allow the company to make investments totaling 4.5 billion dollars over the coming year, she said.

To that must be added the capitalization of Banco Estado, via which it will be able to expand lending to small businesses by 1.5 billion and write 2 billion worth of home mortgages for low-income families.

Bachelet said that an additional 11,500 jobs will be created with the implementation of these measures. Simultaneously, the Housing Ministry will have its available resources increased to accelerate the provision of subsidies with the aim of enabling the construction of 16,000 homes and apartments.