The plan, which contains some measures that must be approved by Congress, includes US$700 million for public works projects such as street paving and the repair of public schools and clinics, Ms Bachelet said.

'It will generate economic activity and jobs and leave projects that will benefit the entire community for decades,' she said.

The plan should ensure that Chile's economy grows by 2 per cent to 3 per cent this year, the president added.

Ms Bachelet's announcement came just hours after the Central Bank said the nation's economy expanded by only 0.1 per cent in November, its slowest pace since March 2002. Growth slowed to 3.7 per cent in the 12 months through November, down from 4.4 per cent in the previous 12-month period.

Ms Bachelet's measures include granting a one-time payment of US$63 for all poor children under 18. The payments, to be made in March when the school year starts, are aimed at helping 3.7 million people.

Low-salaried workers ages 18 to 24 will receive government subsidies equaling 10 per cent of their salaries, as will their employers, Bachelet said.

The plan also includes tax incentives and measures to provide small businesses with easier access to financing.

To pay for the measure, Ms Bachelet plans to tap a multibillion-dollar fund established with the proceeds of the country's main export, copper, which was selling for as much as US$4 a pound until several months ago. Prices have since dropped to US$1.40 per pound. -- AP