SAO PAULO: Luiz Inácio Lula da Silva has won an unprecedented fourth term as Brazil’s president, overcoming a first-round deficit to defeat Senator Flávio Bolsonaro in a runoff that divided the country almost evenly.
Lula took 51.8% of valid votes to Bolsonaro’s 48.2%, according to the Superior Electoral Court, with nearly all ballots counted Sunday.
The result is historic as the first time since Brazil returned to direct elections in 1989 that a candidate has won the final runoff after losing in the first round.
Bolsonaro refused to concede defeat, saying he would seek the annulment of the outcome, Reuters reported. He also called a ruling by Supreme Court Justice Cristiano Zanin to extend voting by two hours “unacceptable.”
The election process was marred by allegations of voter suppression. Lula’s campaign reported suspended public transportation in some key areas, prompting the court to extend voting by two hours. Bolsonaro’s campaign had also requested an extension, citing heavy rains that shut polling stations in the south, a right-wing stronghold.
The victory of the 80-year-old leftist, who had trailed in the first round, blocks a rightward shift in Latin America that U.S. President Donald Trump has backed.
Trump, who had labeled Bolsonaro’s first-round lead as “a very, very big victory,” would have preferred a Brazilian president more closely aligned with U.S. foreign policy as Washington seeks to project U.S. power across the Americas, according to Daniela Portella Sampaio, senior research fellow for Latin American Security at the U.K. think tank Royal United Services Institute.
Lula, who has publicly sparred with Trump, is set to govern from 2027 to 2030. He will face a Congress where Bolsonaro’s Liberal Party holds the largest bench in decades, and a substantial public debt that he will need to stabilize.
Brazil under Lula’s leadership has grappled with worsening fiscal health and mounting public debt driven by double-digit interest rates, elevated debt-servicing costs and rigid mandatory spending. Gross debt reached 82.9% of the country’s GDP in August, the highest since March 2021, according to the Central Bank of Brazil.
Investors are bracing for heightened volatility across Brazilian markets Monday following Lula’s victory, as the right-wing Bolsonaro was seen as more likely to push for fiscal austerity and deregulation.
The iShares MSCI Brazil ETF (EWZ) plunged nearly 20% in overnight trading following the election results.
Analysts had expected a rally in Brazilian assets before Sunday’s results, with Bolsonaro holding a narrow lead earlier this month. Chris Turner, global head of markets and regional head of research for UK & CEE at ING, had forecast both the currency and bond markets to rally if Bolsonaro won.
The new president will need to convince investors that Brazil can stabilize its debt trajectory, said Alejo Czerwonko, a fellow at the Atlantic Council. Lula’s administration will likely extend a more “gradual approach,” building on the existing fiscal framework while seeking to preserve public investment and social spending, Czerwonko said.
Goldman Sachs analysts expect “modest measures” to contain the government’s spending growth, alongside further increases in an already high tax burden, while major structural reforms remain unlikely.
Leaders from across Latin America largely congratulated Lula on his historic win.
Peruvian President Keiko Fujimori, in a post on X late Sunday, hailed Lula’s victory, calling it a “democratic day” for the Brazilian people. Uruguayan President Orsi Yamandu congratulated Lula over a call, calling the Brazilian president a “friend.”
Lula’s victory came the same day that Serbia’s long-serving strongman leader, Aleksandar Vucic, conceded defeat in a parliamentary election to a student-led opposition movement, ending 14 years of his leadership.
