Brazil’s presidential election was headed toward a second round Sunday after Senator Flavio Bolsonaro built an unexpectedly strong first-round lead over President Luiz Inácio Lula da Silva.
With nearly 85% of ballots counted, Bolsonaro had 48.47% against Lula’s 43.49%. A candidate requires more than 50% to avoid a runoff.
Datafolha projected that the race would proceed to a second vote, scheduled for October 25.
The result is notable because pre-election polling had generally shown Lula leading the first round by around three percentage points. Votes were still being counted, however, and Lula’s northeastern strongholds were reporting more slowly than Bolsonaro-leaning southern states.
For markets, the election comes at a sensitive moment.
Brazil’s public debt has risen above 82% of GDP, while the government has lowered economic-growth projections to 2.0% for 2026 and 2.3% for 2027.
Cost-of-living pressures, household debt and concerns over public finances have dominated the economic debate surrounding the campaign.
The runoff could also affect Brazil’s relationship with Washington. Bolsonaro has cultivated ties with the Trump administration, while Lula’s government has clashed with Washington over trade and security.
Investors will now move from first-round polling toward the more consequential question: how supporters of eliminated candidates redistribute their votes.
With polling previously indicating a close Bolsonaro-Lula runoff, fiscal policy, economic appointments and the candidates’ approach to government spending are likely to receive increasing market attention over the next three weeks.
