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SANTIAGO, Sept 29 (Reuters) - Chilean President Michelle Bachelet said the country's budgeted spending will rise 2.7 percent in 2017 compared with this year, one of the lowest rates of growth since the 1990s, as a sluggish economy has crimped income.
Bachelet, speaking in a televised broadcast on Thursday evening, said the bulk of the spending increase next year would go on education, health, and policing. In 2016, spending is expected to rise 4.2 percent.
With 2017 an election year, the austere increase is unlikely to please lawmakers in her left-leaning coalition.
Center-left Bachelet began her term in 2014, pledging to address inequality with wide-ranging reforms to tax, education, pensions and more.
But her plans have been partly thwarted by a slide in the price of copper, subdued investment, poor legislative planning and opposition to elements of her reforms from both the right and left.
Despite being one of Latin America's wealthiest and most stable nations, polls show deep dissatisfaction with the government, mainstream politicians and the direction in which the country is going.
"Not everything can go at the same speed ... this budget is the best demonstration that we maintain our desire to make progress. So Chile should recover its optimism despite the difficulties," said Bachelet.
Codelco, the world's biggest copper miner, could "rest assured" that its capitalization would continue, she added. The state-run producer returns all its profits to the state, but has had a torrid couple of years following the fall in the copper price.
(Reporting by Rosalba O'Brien; Editing by Sandra Maler, Bernard Orr)