What to expect from Brazil's election

Thursday, October 4, 2018

The political future of Latin America's biggest economy will be set this month. On Sunday Brazilians vote for president, governors and legislators, but all analysts believe we will not have a new president that day.

To win in the first round a candidate must obtain more than 50% of the votes.

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Polls show the election will head to a second round on October 28th, with far right candidate Jair Bolsonaro of the social liberal party facing Luiz Inácio Lula da Silva's stand-in Fernando Haddad of the leftist workers party (PT). "Polls for Brazil's October general election indicate the highest risk of a move to the political extremes since Brazil's return to democracy in 1985", said Carlos Caicedo, associate director of LatAm country risk, at IHS Markit, calling both of them "anti-establishment" candidates.

"There is a clear risk of policy reversal affecting legal and regulatory changes improving the country's business environment. There is also greater risk of failure to complete essential changes to the country's pension system and to reduce its fiscal deficit", he added.

Caicedo stressed that Bolsonaro remains "unknown" for the markets, while Haddad is "espousing the left-wing policies of the PT (Worker's Party), which are partially responsible for Brazil's severe macroeconomic deterioration".

BNamericas senior managing editor Chris Lenton made a similar observation this week in his opinion piece. "Most people, including myself, sense this is not good news for Brazil. Bolsonaro, who was knifed at a rally in mid-September by an attacker claiming he was under God's orders, is a former army captain who has created controversy with consistently unhinged and wildly inappropriate comments. For this, he has been called the Brazilian Donald Trump," he wrote.

"Meanwhile, former São Paulo mayor Haddad, a soft-spoken academic, was only slotted into the race on September 11 by the traditional leftist workers party, or PT. They did so when they finally saw that ex-president Luiz Inancio Lula da Silva, or Lula, who is Brazil's most popular politician, would not be able to run for office. Lula is currently serving a 12-year prison sentence for corruption", Lenton added.

Take a look at some of BNamericas' reports and news stories to better understand what will happen in Brazil during the next four weeks.

By Christopher Lenton - Friday, September 14, 2018

This month we focus in on Brazil and its upcoming election. Unlike in Mexico earlier in the year, the election remains completely up in the air with only weeks to go before the first round. We get into what all of this means. And as always we look closely at political risk in the six main economies in Latin America.

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