SANTIAGO, Sept 1 (Reuters) - Chile’s President Michelle Bachelet said the government will increase public spending by $500 million through the remainder of the year to help counter a stagnating economic growth and a drop in investment.
The economy of the world’s top copper producer grew at its weakest pace since 2009 in the second quarter as investment waned and a previously rapid expansion in consumer spending slowed.
“It’s clear that we can’t waste time nor wait until 2015 ... this plan is meant to inject dynamism into our economy in the short term,” Bachelet said in a televised event from the Moneda presidential palace.
The additional $500 million represents a 12 percent increase over currently budgeted public spending.
Bachelet, in her second term in office, is pursuing ambitious tax and education reforms aimed at reducing Chile’s steep income inequality.
She said measures would be announced at a later date to help reactivate the economy, which would “address the problems that our economy has and the issues we haven’t historically dealt with adequately,” she said.
The government would also look to help small- and medium-sized exporters by easing bureaucracy and financing, she said, as businesses seek to take advantage of a weaker peso.
Chile’s peso currency has weakened over 10 percent versus the dollar this year, making exports more competitive abroad. (Reporting by Anthony Esposito Editing by W Simon)