A prominent Chilean business leader presented the country's economy minister with an inflatable doll on stage at an event late on Tuesday, sparking a social media storm and criticism by President Michelle Bachelet.

Exporters' association Asexma traditionally gives humorous gifts to VIPs attending its annual dinner, but the inflated sex toy - which was handed to economy minister Luis Cespedes with the comment that it could be used to "stimulate the economy" - backfired.

Photos of the event in local media showed a grinning Cespedes holding the life-sized blow-up doll on stage, alongside other ministers - all male - clutching their gifts, which included a blond wig meant to represent U.S. President-elect Donald Trump.

"The fight for respect for women has been an essential principle in my two governments," said Bachelet, Chile's first female leader, on her Twitter account. "What occurred at the Asexma dinner cannot be tolerated".

Her comment was retweeted more than 1,200 times, and echoed by others.

"I am an entrepreneur and union member," tweeted small business owner Jacqueline Galvez. "This kind of situation is unacceptable."

Center-left Bachelet ran the country between 2006 and 2010 and began her second term in 2014, with her first administration in particular notable for the number of women appointed to cabinet posts. In between the two terms, she led U.N. Women.

However, glaring inequalities persist in many areas of Chile's traditionally 'machista' society. Access to abortion is illegal, skimpily dressed female 'promoters' are a common sight at business and sporting events, and women's participation in the labor market remains relatively low.

"The event with the Asexma doll proves right those who say that our business world is ignorant and isolationist," tweeted political scientist Cristobal Bellolio.

Cespedes said the gift was unexpected, but apologized, as did Asexma head, Roberto Fantuzzi.

'Ministro de Economia', 'Ministro Cespedes' and 'Roberto Fantuzzi' were all trending on Twitter in Chile on Wednesday, as was the hashtag #munecainflable, the Spanish for inflatable doll.