* Brazil Q3 GDP stalls as euro debt crisis widens
* Central bank, gov't have already eased policy
* Consumption, investment both fall on quarter (Adds details, context, changes byline)
By Luciana Lopez and Stuart Grudgings
SAO PAULO/RIO DE JANEIRO, Dec 6 (Reuters) - Brazil's economy stalled in the third quarter as the euro zone debt crisis dragged on global demand and the country's increasingly indebted consumers retreated after nearly three years of buoyant spending.
Latin America's biggest economy posted zero growth from the previous quarter, the government said on Tuesday, a sharp slowdown from breakneck annual growth of 7.5 percent in 2010 that far outstripped developed nations.
The downturn has moved to the top of the agenda for President Dilma Rousseff, who is trying to tame inflation without derailing the boom that has lifted more than 25 million people out of poverty in the last decade and made Brazil a rare bright spot in an otherwise grim global economy.
Brazil's third-quarter slowdown hit sectors that had been roaring ahead, with consumer spending - about 60 percent of the economy - slumping for the first time since the end of 2008.
Capital spending fell, as did the industrial sector, which has struggled for much of this year because of a strong local currency, which has opened the floodgates to cheap imports, especially from China.
"The most shocking aspect of the number was the fact that all demand components contracted," said Mauricio Rosal, chief economist at Raymond James & Associates in Sao Paulo.
"The reversal ... is very worrisome, and the worst is that there's not much that can be done about it - we depend on a solution to the problems in Europe."
The cooling economy has hit a broad swath of Brazil: Auto output plunged in September as carmakers idled factories to whittle down high stocks, steel mills have been slowing production as a glut in the market depresses prices, and job creation has also slowed sharply, with the government admitting it likely won't meet its target for the year.
The Brazilian economy is expected to grow about 3 percent this year - better than crisis-hit Europe but well behind the pace of other big emerging markets such as India and China.
The government said the slowdown was temporary, predicting that growth would pick up in the fourth quarter and in 2012.
"We have the situation under control, in contrast to other countries, where growth is falling because of a fundamental lack of market," Finance Minister Guido Mantega said.
Brazil GDP graphic: link.reuters.com/rug45s
Interest rate graphic: link.reuters.com/zyv35s
The government sees growth around 5 percent next year, with the central bank saying in a statement that the country is in a sustained cycle of expansion despite the flat third quarter.
But many analysts say that's unrealistic. With high inflation limiting government efforts to boost growth, spiking default rates and creaking infrastructure, Brazil's problems go beyond a gloomy global outlook.
The zero growth was in line with a Reuters poll of 25 analysts. [ID:nE5E7M401F] The economy grew 2.1 percent in the third quarter from the year-ago period, IBGE said, below expectations of 2.4 percent in the Reuters poll.
Citing concerns about the global financial turmoil, Brazil's central bank has cut interest rates three times since August. The government also announced a slew of tax breaks last week to support consumption, reprising policies in the wake of the 2008 financial crisis. [ID:nN1E7B001T]
But Brazil has little room for further fiscal stimulus. The annual inflation rate has been stuck above a 6.5 percent target ceiling since April even as the economy cools.
Concerns about overheating also prompted the central bank to hike interest rates five times earlier this year by a total of 1.75 percentage points before it reversed course in August.
That tightening, along with other measures to prevent overheating, came right before an unexpected worsening in major economies, the sum of which helped brake Brazil abruptly.
STILL VULNERABLE TO TRADE SLOWDOWN
Monthly data from October and November suggest the slowdown is continuing and even deepening as the euro zone crisis hurts demand for Brazil's commodity-heavy exports, about a fifth of which go to the European Union.
Export demand was a rare bright spot in Tuesday's data, up 1.8 percent, in part helped by a weaker Brazil real BRBY, which shed 16 percent of its value in the third quarter.
But that still marked slower export growth from 2.3 percent in the previous three months. The huge agriculture sector, often referred to as the "green anchor" of Brazil's economy, grew 3.2 percent from the previous quarter.
"That actually ends up being worrying - having GDP dependent on trade in current conditions," said Mauricio Nakahodo, an economist with CM Capital Markets.
Adding to the grim tone, the IBGE revised down growth data from the start of the year: to 0.7 percent in the second quarter from the first - down from 0.8 percent - and to 0.8 percent in the first quarter, down from 1.2 percent.
Brazilian consumers could be approaching the limit of their credit-fueled spending spree of recent years. Their spending fell by 0.1 percent in the third quarter from the second.
The industrial sector also shrank, down 0.9 percent in the period, and capital spending fell 0.2 percent. (For the IBGE report, please see: here;id_pagina=1) (Additional reporting by Guillermo Parra-Bernal in Sao Paulo and Alonso Soto and Tiago Pariz in Brasilia; Editing by Todd Benson and Andrew Hay)