Chile unveils measures to boost economic growth

SANTIAGO, March 13 (Reuters) - The Chilean government on Tuesday unveiled measures to stimulate the economy, which grew slightly more than 4 percent last year, its worst performance in three years.

The measures included tax breaks for companies buying fixed assets, new long-term credit lines for small- and medium-sized companies and changes to the laws governing trade in financial derivatives.

The measures also aim to modernize Chile's capital markets, make it easier to use the Chilean peso in international financial transactions and to simplify the rules governing investments in Chile by nonresidents.

Chile economic growth slowed sharply during 2006 following two consecutive years of growth in excess of 6 percent. The government has yet to release the gross domestic product growth figure for last year but it is expected to be 4.2 percent.

The central bank has forecast a growth rate of between 5 and 6 percent for this year, although many economists expect the figure to come in toward the bottom end of that range.

In recent months, a growing number of economists have urged the government to do more to boost growth, saying Chile can afford to spend more of its healthy fiscal surplus to reinvigorate the economy.