Lula secured a fourth term with 51.78% of the vote, setting a record as the first candidate in Brazil to lose the first round and then stage a comeback victory since direct elections resumed in 1989, yet a far tougher governing environment now awaits him.
According to Xinhua, incumbent Brazilian President Luiz Inácio Lula da Silva defeated Senator Flávio Bolsonaro in the October 25 runoff to claim a fourth presidential term. It was the biggest victory of his nearly five-decade political career, and possibly the most difficult start to a government he has ever faced. Citing Folha de S.Paulo, with 99.99% of polling stations counted, Lula prevailed by 51.78% to 48.22%, and Brazil's Superior Electoral Court (TSE) formally confirmed the result at 9:10 p.m. that evening.
Three weeks earlier in the first round, Lula trailed Flávio Bolsonaro by 45.16% to 47.03%, a gap of more than 2.2 million votes. In the runoff he reversed the situation and ultimately led by more than 4.4 million votes. A Tokyo-listed ETF tracking Brazil's Bovespa index fell nearly 15% during Asian trading hours on the news, reflecting market doubts about the fiscal policy direction of a Lula administration.
Flávio Bolsonaro refused to concede, saying he would seek to have the election result annulled on the grounds that the Supreme Court had ruled that day to extend voting by two hours. According to Reuters, Mario Braga, a Latin America analyst at risk consultancy RANE, said right-wing protests were possible in the coming days, but that "the probability of the result being overturned is extremely low."
How the comeback happened: missteps, mobilization and state resources
Lula's reversal was the product of multiple overlapping factors.
According to Reuters, polling firms pointed to higher-than-expected turnout as a key driver of Lula's victory. Leonardo Barreto, co-founder of consultancy Think Policy, said voters faced "a choice between change tinged with some unease and a familiar path that guarantees certain rights," and in the end most chose the latter.
The opponent's mistakes were equally crucial. According to the Financial Times, Flávio Bolsonaro called Lula "nine fingers" during a TV Globo debate, a jibe alluding to the finger Lula lost in a factory accident at age 17. The remark quickly spread on social media, and Lula shot back that his rival had "never worked a day in his life" and demanded an apology. Citing Folha de S.Paulo, after winning the first round, Flávio Bolsonaro displayed clear overconfidence, behaving as if he had already won, and proposed a vaguely worded constitutional amendment claiming to "re-democratize Brazil," which drew widespread skepticism.
At the same time, the risk of the Bolsonaro family returning to power mobilized left-wing and centrist voters. On the eve of the runoff, a large spontaneous demonstration appeared on Avenida Paulista in São Paulo, the biggest of the entire campaign.
On the tactical level, Lula adjusted quickly after losing the first round. He replaced the leadership of his campaign team and handed digital strategy to Congressman André Janones, who built a WhatsApp channel called "Exército do Lula" (Lula's Army) with more than 10 million followers.
Lula also fully leveraged the resources of incumbency. He rolled out a series of policy promises aimed at voters, including free nationwide public transport on weekends and a 15% increase to his signature social welfare program. Economists estimate the total cost of these promises next year at at least 43.6 billion reais (about US$8.8 billion), with the actual figure likely higher.
Congress shifts right, narrowing room to govern
Beneath the glow of victory, the political reality facing Lula is grim.
According to Reuters, Brazil elected its most conservative Congress since democracy was restored in the 1980s. Flávio Bolsonaro's Liberal Party (PL) and its allies could together control more than 280 seats in the Chamber of Deputies and as many as 50 in the Senate, forming a solid opposition majority in both chambers.
The Financial Times noted that Lula will govern as a left-wing president in a country whose political center of gravity has shifted to the right, and every piece of legislation will face exhausting negotiations in Congress. Citing Folha de S.Paulo, although Lula has support from parties such as PSD and MDB and parts of the "centrão" bloc, the judiciary is also divided, and right-wing forces in the Senate have the ability to launch impeachment proceedings against Supreme Court justices.
In a pre-election analysis, the Atlantic Council pointed out that for Lula, a rightward shift in Congress means advancing his domestic agenda will require broader negotiation, and the trend of the president ceding budget, legislative and key appointment powers to Congress may deepen further.
Fiscal pressure: debt, interest rates and market confidence
The economy is the toughest test of Lula's fourth term.
The International Monetary Fund estimates that Brazil's total debt will rise to 98% of GDP this year, far above the emerging-market average, with a fiscal deficit of 8% of GDP, and that is before the large-scale spending promises made during the campaign. The consequence of loose fiscal policy is a real interest rate close to 10%, squeezing both corporate investment and households burdened with consumer debt.
Brazil's public debt has already exceeded 82% of GDP, the highest since the pandemic, and the government forecasts economic growth of only 2.3% next year. Goldman Sachs expects Lula to make at best limited progress in controlling spending during his fourth term, because he will insist on a state-led growth model.
Alejo Czerwonko, chief investment officer for emerging markets at UBS Global Wealth Management, part of the Atlantic Council, said in a pre-election analysis that if Lula won, he might favor a more gradual path of fiscal consolidation, adjusting step by step while maintaining public investment and social spending, but his challenge would be convincing the market that such adjustment is enough to stabilize the debt trajectory. He warned that if the new government cannot present a convincing fiscal plan, borrowing costs will remain elevated, constraining investment and economic growth.
Media cited analysts as saying that if Lula does not take substantive measures to tighten public spending, he will face a serious credibility crisis in financial markets.
Foreign policy direction: multilateralism and trade diversification
On foreign policy, Lula's fourth term is expected to continue his long-standing line of emphasizing Brazilian sovereignty, diversifying trade partners and deepening multilateral diplomacy.
Lula's victory cost Trump a potentially important ally, since a Flávio Bolsonaro win would have further expanded the bloc of pro-Washington right-wing governments in Latin America. Lula's former foreign minister Celso Amorim told Reuters that Lula "will be fundamental to building a balancing pivot in Latin America, he is the balance."
At the regional level, Lula had previously pushed for the signing of the EU-Mercosur agreement and the implementation of the EFTA agreement, and advanced negotiations with Canada. The Atlantic Council argued that Lula's foreign policy will continue to emphasize regional integration and trade diversification rather than tilting toward any single major power.
On relations with the United States, the Atlantic Council noted that Lula had already rejected the minerals alliance cooperation framework proposed by Washington in February this year, leaving limited room for a bilateral reset, and Lula is expected to continue negotiating tariffs with Washington while insisting on Brazil's sovereign stance over its mineral resources.
The Bolsonaro camp: power reshuffling after defeat
For the Bolsonaro movement, this defeat has opened a window for an internal struggle over leadership.
Citing Folha de S.Paulo, after losing his Senate seat, Flávio Bolsonaro will lose political leverage, while Tarcísio de Freitas, who won re-election as São Paulo governor by a wide margin in the first round, is already seen as a strong contender for the 2030 election. Flávio currently faces two investigations: one into alleged fundraising for his father's biopic "Dark Horse," and another over suspected links to a money-laundering case involving a betting company.
Folha de S.Paulo noted that the Bolsonaro name still carries strong political appeal, and Brazil's polarized political landscape will not fade in the short term.
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