(Updates with additional measures, economic data)

By Rodrigo Martinez

SANTIAGO, Jan 5 (Reuters) - Chilean President Michelle
Bachelet on Monday announced a $4 billion stimulus package
aimed at fending off global financial crisis by beefing up
public spending on infrastructure and providing subsidies and
tax rebates.

Bachelet said the plan aimed to underpin growth of 2.0
percent to 3.0 percent this year, adding public spending would
rise 10.7 percent in 2009 in real terms and translate into an
implied effective fiscal deficit of 2.9 percent of gross
domestic product.

"Facing this crisis will be the number one priority of my
government this year," Bachelet said in a televised national
address just hours after data showed Chile's economic growth
fell to its slowest monthly pace in nearly 7 years in November
as the global crisis bit.

She said the plan also included a $1 billion capitalization
for state copper giant Codelco, the world's No.1 producer, to
help shore up its investment plans. The stimulus package will
be funded from copper windfall earnings saved in sovereign
wealth funds as well as via bond issuance, she said.

Bachelet said the plan aimed to create 100,000 jobs, would
increase public spending by nearly $1.5 billion, with $700
million of that destined for public works projects and would
include handouts for the most vulnerable families as well as a
temporary cancellation of stamp duty.

The package also would lower employer contributions for
small- and medium-sized companies, include income tax rebates
and would deprive the government of around $1.5 billion in
fiscal income, Bachelet said.

The stimulus package comes after the government unveiled a
separate $1.15 billion package of measures in November to spur
lending to middle income families and small and medium-sized
businesses to help shield them from global financial turmoil.

But while Chile is seen better placed than most of its
Latin American neighbors to cope with the crisis because of its
debt profile, a cushion of around $21 billion worth of copper
boom savings in sovereign wealth funds and a similar amount of
central bank reserves, it is not immune.

Chile's economic activity index, the IMACEC, rose a
slower-than-expected 0.1 percent in November compared with a
year earlier, when it climbed 4.4 percent, reinforcing
expectations of a cut in official interest rates this week as
the global crisis spreads.

Industrial production sank a bigger-than-expected 5.7
percent in November from a year earlier to its lowest level in
nearly a decade. Copper output tumbled in November for a third
consecutive month, falling 6.4 percent.

In November the the central bank cut its 2009 growth
estimate to between 2.0 percent and 3.0 percent, compared with
a forecast in September for growth between 3.5 percent and 4.5
percent, citing the spiraling global financial crisis and
plunging prices for copper.
(Writing by Simon Gardner; editing by Carol Bishopric)