Brazil central bank cuts 2011 growth forecast to 3.5%

President Dilma Rousseff
Image caption President Dilma Rousseff has vowed to get Brazil's spending boom under control

Brazil's central bank has lowered its forecast for economic growth to less than half of last year's, partly blaming the slowing global economy.

The central bank lowered its prediction for growth in 2011 to 3.5%, from 4% that it expected in June.

Brazil has boomed as other countries have stalled, growing 7.5% last year.

The bank pointed to "the deterioration in the international outlook" for the downgrade, and also to spending cuts enacted by President Dilma Rousseff.

The central bank said there could be further "moderate" cuts to the basic interest rate, which was lowered in August to 12%, from 12.5%.

In February, the Brazilian government will implement 50bn reais ($30bn; £19bn) of spending cuts in order to curb inflation and help prevent the economy from overheating.

This was partly to remove all stimulus packages introduced since the onset of the global financial crisis in 2008.

Social spending and infrastructure projects will not be affected, the government has said.

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