Latin America October 31, 2022 / 05:11 pm UTC

Brazil Election Results: Lula Wins by a Narrow Margin

By Lucas Eduardo Veras Costa

Bottom line: Brazil’s presidential runoff between incumbent Jair Bolsonaro and former President Luis Inacio Lula da Silva resulted in a narrow win by Lula, who got 50.9% of the votes. We do not yet know the identity of his economic team, but we believe that he may appoint a pro-market and conservative figure. Bolsonaro is yet to concede the victory for Lula, and there is a growing possibility that he will contest the results, which we believe is doomed to fail.

Workers Party candidate Lula is set to return to the presidential chair on Jan. 1 after winning the runoff against the Liberal Party’s Bolsonaro. Lula’s margin of victory was narrower than polls predicted, with Lula’s 50.9% representing the tightest presidential runoff since the Brazilian re-democratization in 1989.

Lula is yet to announce his cabinet, but he has already announced that he is recreating the Women Ministry and the Indigenous People Ministry. The key question is the composition of his economic team. Several conservative economists have announced their support for Lula, who has said he wishes to mimic his first presidential term, in which he had a politician advised by several economic specialists at the Ministry of Economy. Our take is that Lula shall signal to the market the need for economic credibility by appointing a conservative economy minister. Several sources point to Henrique Meirelles, who was Michel Temer’s economy minister and president of the central bank during Lula’s term. Meirelles was in charge when the expenditure ceiling rule was approved and is viewed as a figure who would give credibility that no left-wing experiments would be made during Lula’s term and that fiscal responsibility will be a top priority of Lula’s government. 

Bolsonaro Is yet to Concede

Bolsonaro is the first incumbent president not to be re-elected since re-democratization. It is likely that a mixture of poor pandemic management and Lula’s wide popularity weakened Bolsonaro’s chances of re-election. It is a common practice in Brazil that once presidential election results come out, the loser acknowledges the defeat, but Bolsonaro is yet to do so. Additionally, several operations were done in the Northeast region by the police to track irregular buses that were transporting people to vote. As Lula had a wide margin over Bolsonaro in this region, this act was viewed as an attempt by Bolsonaro to stop Lula’s voters reaching the polls. 

Bolsonaro has been advocating against electronic voting (here), and there is a growing possibility that he will not recognize the election and claim that it was fraudulent. However, various high-ranking legislators and all of the members of the Supreme Court have already recognized Lula as the winner, along with several Bolsonaro allies. If Bolsonaro does contest the results, he will mostly be alone in this task and is doomed to fail. 

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Analyst Declaration
I, Lucas Eduardo Veras Costa, the lead analyst declare that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further declare that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.