* IPCA index rose 0.21 pct in March from Feb
* Forecasts ranged from 0.30 to 0.40 pct
* 12-month inflation rate slows to 5.24 pct (Adds comments from Finance minister, market analyst)
By Silvio Cascione
SAO PAULO, April 5 (Reuters) - Inflation in Brazil slowed more sharply than expected in March as all components rose at a lower pace except food and fuel, backing up the central bank's case for near record-low interest rates as it tries to revive economic growth.
The world's sixth-largest economy, Brazil was hit by the global slowdown and nearly fell into recession in late 2011. prompting President Dilma Rousseff's government to stimulate the economy with tax breaks, subsidized loans and steps to curtail the strength of the country's currency.
Brazil's inflation report coincides with data showing March inflation also slowed sharply in Chile, Colombia and Venezuela, suggesting rising food and fuel costs have not yet triggered broader price pressures in the region. ,
Brazil's benchmark IPCA consumer price index rose 0.21 percent in March, slowing from its 0.45 percent rise in February, government statistics agency IBGE said on Thursday.
"That's very good. It shows inflation is under control, which opens the door for faster growth," Finance Minister Guido Mantega told journalists in Brasilia.
The index was expected to rise 0.36 percent, according to the median forecast of 27 economists surveyed by Reuters, Estimates ranged from 0.30 percent to 0.40 percent.
In the 12 months through March, the IPCA index rose 5.24 percent, IBGE added, slowing for the fifth month in a row after a 5.85 percent increase in the 12 months through February.
Analysts forecast a 12-month inflation rate of 5.4 percent in March, according to the median forecast of 18 analysts.
Brazil's central bank targets annual inflation within 2 percentage points of 4.5 percent. March's 12-month inflation rate is lower than the median market forecast for the year-end, according to a central bank weekly survey.
The bank is widely expected to cut its benchmark interest rate later this month for the sixth time in a row, to 9 percent. Latin American's largest economy disappointed authorities and investors with meager 2.7 percent growth last year after a 7.5 percent expansion in 2010.
Most analysts expect a reversal in monetary policy next year, as faster economic growth could fuel another round of rising inflation. However, yields <0#2DIJ:> on interest rate futures tumbled shortly after the data, suggesting a lower probability of such a change next year.
"There will probably be a downward revision in inflation forecasts for 2012," said economist Flavio Serrano, of Espirito Santo investment bank, in São Paulo. "But inflation should bottom out in May and accelerate onwards. Medium-term inflation in Brazil is closer to 5.5 than to 4.5 percent."
Latin American peer Chile also reported lower-than-forecast inflation figures earlier on Thursday, boosting bets the central bank will keep its key rate at 5.0 percent in coming months as it adopts a 'wait-and-see', weighing global economic risks against a better-than-expected local data.
Chilean consumer prices rose 0.2 percent in March, significantly below expectations for a 0.5 percent increase in a Reuters poll, and following a 0.4 percent rise in February.
In Colombia, the government on Wednesday evening reported its consumer price index rose 0.12 percent, compared with expectations for 0.33 percent in a Reuters poll, and following a 0.61 percent rise in February.
In Venezuela, consumer prices rose 0.9 percent in March, the lowest monthly rate in the last four years, President Hugo Chavez said on Saturday.
In Brazil, education costs slowed sharply to show a rise of 0.54 percent in March, from 5.62 percent in February. Personal expenses rose 0.55 percent in March, down from February's 0.88 percent increase.
Food costs rose 0.25 percent, slightly more than the 0.19 percent increase the prior month. Transportation prices including fuel and bus fares rose 0.16 percent, from a decline of 0.33 percent in February.
For the IBGE statement on inflation, please go to: here (Additional reporting by Alexandra Ulmer in Santiago, Julia Symmes Cobb in Bogota and Luciana Otoni in Brasília; Editing by Brad Haynes and W Simon)