By Sebastian Boyd and Nathan Gill

March 12 (Bloomberg) — Chilean President Michelle Bachelet replaced her foreign and defense ministers as the government works to confront an economic slump.

    
Mariano Fernandez, former ambassador to the U.S., was named foreign minister, replacing Alejandro Foxley, who is returning to the economic research group he used to run. Government spokesman Francisco Vidal will become the new minister of defense, replacing Jose Goni, the government said on its Web site.

    
Bachelet is in her last 12 months in office with her popularity at its highest level since April 2006, the month after she took up the post. She left Finance Minister Andres Velasco in place to implement a $4 billion economic stimulus package.

    
“The times to come are going to be hard and will be decisive in successfully confronting the economic crisis,” Bachelet said today in a statement on the government’s Web site.

    
Foxley had previously said he wished to step down, she said. He was the most popular of Bachelet’s ministers, according to a February poll by survey firm Adimark Gfk. He will be joining the Corporation for Latin American Studies, or Cieplan, a Santiago-based research firm which he ran from 1976 to 1990.

    
“I want to generate ideas for Chile,” he told reporters today.

    
Goni will represent Chile in the U.S., according to a statement circulated to reporters at the presidential palace.

    
Carolina Toha, a lawmaker in the Chamber of Deputies, Chile’s lower house, will replace Vidal as government spokeswoman. Toha was a founding member of the Party for Democracy, one of the member parties of Bachelet’s coalition. She has a doctorate in political science and has been a lawmaker since 2002, representing Santiago.