Brazil’s Presidential Race Narrows to Statistical Tie

Six weeks before the first round, Brazil's presidential election has become so close that polls can no longer statistically distinguish between the two leading candidates.

A Quaest poll published on August 14 showed Lula with 43% of voting intentions in a simulated second-round matchup against 40% for Flávio Bolsonaro — effectively a statistical tie, given the poll's two-percentage-point margin of error. The result marked a decline in Lula's lead recorded by Quaest 10 days earlier, when he was five points ahead, with 44% against 39%.

The first-round scenario is less tight. Lula was leading with 38%, compared with 31% for Flávio Bolsonaro, while Renan Santos and Ronaldo Caiado had 4% each and Romeu Zema had 2%.

Voting will take place on October 4, with 156 million registered voters. The official campaign period runs until October 3.

The candidates

Luiz Inácio Lula da Silva, 80, is seeking an unprecedented fourth term after governing the country from 2003 to 2011 and again since 2023. He launched his candidacy on August 2 at the Workers' Party (PT) convention in São Paulo.

Jair Bolsonaro, his opponent in 2022, is barred from standing for office after being indicted and imprisoned for conspiring to carry out a coup. The former president has endorsed his son, Senator Flávio Bolsonaro, as the candidate of the Liberal Party (PL).

Also running are Romeu Zema of the NOVO party, who until recently was governor of Minas Gerais; Ronaldo Caiado of the centre-right PSD and former governor of Goiás; and Renan Santos, an anti-establishment activist. Pablo Marçal registered his candidacy despite questions over his eligibility, with a court decision still pending.

Lula has turned the campaign into a question of sovereignty

The incumbent president's strategy has been notably focused on the international arena for a head of government who needs to defend his domestic record.

Rather than concentrating his convention speech on that record, Lula highlighted Brazil's position in an unstable world. He backed increased defence spending and promised to protect Brazil's reserves of rare earths and other critical minerals from foreign control, saying he wanted to prepare the country so that no one could invade it.

Lula warned that China, the United States and France would not have access to Brazil's mineral wealth without respecting the country's sovereignty.

The strategy comes after two rounds of US tariffs imposed on Brazilian products in July. Washington justified the measures on the grounds of alleged unfair trade practices, while the Brazilian government rejects that justification.

According to a Bloomberg assessment, Lula, whose approval rating hit historic lows a year ago, has become the favourite for re-election with the help of two right-wing adversaries — Donald Trump and Jair Bolsonaro.

Where the incumbent is vulnerable

The government's main weaknesses are domestic and economic.

The rising cost of living and the public deficit remain important points of vulnerability. Surveys conducted earlier this year showed that only 32% of Brazilians considered the economy good, while 54% rated it as bad. Three-quarters of respondents identified inflation as one of their main concerns.

Opposition members in Congress have been campaigning under the slogan "make food cheap again". Public security is also expected to be a major issue, particularly in communities where organised criminal groups exercise significant control.

These pressures have eased somewhat but have not been resolved. Annual inflation fell to 4.44% in July, returning within the Central Bank's tolerance range, although it remains well above the 3% target.

The Selic rate stands at 14% after four consecutive cuts of 0.25 percentage points, while Brazil's nominal fiscal deficit in 2025 was approximately 8.3% of gross domestic product (GDP).

Why the Central Bank is paying attention

The Monetary Policy Committee (Copom) has made clear that its monetary policy decisions depend on a factor beyond its control.

The committee said it continues to monitor how developments related to domestic fiscal policy affect monetary policy and financial assets, reinforcing a cautious stance amid heightened uncertainty.

With a deficit close to 8% and an election that will determine the country's fiscal path through 2027, this dependence represents the clearest link between the political contest and the prices of Brazilian assets.

Analysts have consistently pointed out that the decisive variable for Brazilian markets lies in the federal budget, not the Central Bank.

What to watch

The trend in the polls matters more than any individual survey. Lula's five-point lead in the Quaest poll fell to three points in 10 days, and the direction of the numbers throughout September will be more significant than the level recorded in any particular poll.

The second question is whether the first round will be enough to decide the election. Lula's 38% is below the majority needed to avoid a second round, which would take place later in October.

The third is the fiscal signal. Any candidate leading at the end of September will be assessed by the markets based on what their election programme implies for the public deficit — and Copom will be making the same assessment.