* 12-month inflation slows to 6.22 pct, within target
* Central bank official: Inflation may end 2012 below f'cast
* IPCA index rose 0.56 pct in January from December
SAO PAULO, Feb 10 (Reuters) - Inflation in Brazil eased in January to the slowest annual pace in 11 months, paving the way for more interest rate cuts, and a central bank director said prices are likely to end 2012 below the bank's official forecast.
The benchmark IPCA consumer price index rose 6.22 percent in the 12-month period through January, slowing for the fourth month in a row, government statistics agency IBGE said on Friday.
Other inflation data in Latin America this week mostly showed price pressures under control in January even though the increase in annual inflation in Mexico burst through the top of the central bank's target ceiling for the first time in a year.
Policymakers in Brazil, which struggled to defeat hyperinflation in the 1980s and early 1990s, have been trying to reduce the country's unusually high interest rates to bridge the gap with rates abroad.
"We see a favorable balance of risks for inflation", central bank economic policy director Carlos Hamilton told reporters in the northeastern city of Fortaleza after January's inflation data was released.
"The probability is higher for the (inflation) figure to be better than the 4.7 percent", he added, referring to the latest central bank estimate for 2012's inflation.
Brazil's central bank targets annual inflation within 2 percentage points of 4.5 percent. Analysts expect the rate to fall to 5.3 percent by the end of this year, according to a central bank weekly survey.
Brazil's central bank has cut interest rates four times since August, bringing its benchmark rate to 10.5 percent as it tries to stimulate the economy in the face of a global slowdown.
Consumer prices rose 0.56 percent in January from December, in line with the 0.55 percent increase forecast by 31 economists in a Reuters poll. The index rose 0.50 percent in December.
Local markets showed little reaction to the data, with interest rate futures recouping a small part of this week's drop as investors paid more attention to global worries over the long-standing Greek debt crisis.
January's annual reading is the lowest since February 2011, when the IPCA index had climbed 6.01 percent in 12 months. The 12-month rate later peaked at 7.31 percent in September, the highest in six years.
A smaller-than-expected increase in food prices helped the annual downward trend, said Luciano Rostagno, chief economist at West LB in São Paulo. Food prices gained 0.86 in January from December, versus a 1.23 percent increase in the previous month.
"We usually see food prices rising (faster) in January," said Rostagno.
LIVING COSTS STILL CHALLENGING
Analysts expect the benchmark Selic rate to continue falling to 9.5 percent this year after the central bank said it saw a "high likelihood" of single-digit rates in Brazil.
The central bank's next rate-setting meeting is on March 7.
Despite slowing from last year, the rising cost of living still poses a challenge for many Brazilians who have just joined the country's fast-growing middle class.
"It's all so expensive. Salaries are not compatible with prices in Brazil," said Vera Lúcia dos Santos, a 48-year-old call center manager on Paulista Avenue, a financial hub in Brazil's biggest city, São Paulo.
"You can't afford your daily lunch using only meal cards here", she added. An average meal costs 33 reais ($19) in the area, adding up in a month to more than the monthly minimum wage of 622 reais ($362), a survey by Datafolha institute showed.
This was the first IPCA release using recently announced updated weights that better reflect new consumer trends among Brazilian households. Education and other services costs now weigh less on overall inflation.
"Assuming the previous weightings, the IPCA would have risen 0.64 percent", wrote Flavio Serrano, senior economist at Espirito Santo Investment Bank, in a note to clients.