Brazil cuts inflation forecast amid slower growth

Brazil's central bank lowered its forecast for 2006 inflation, saying seven interest rate increases since September have helped reduce economic growth that was fueling a rise in consumer prices.

The bank reduced its 2006 inflation forecast to 3.8 per cent from 4 per cent. Inflation will start converging with the central bank's targets from the second quarter of next year, the bank said in its quarterly inflation report released in Brasilia.

Consumer prices as measured by the benchmark IPCA inde