BRASÍLIA — Brazil’s economic data and Brazilian voters’ economic mood have diverged sharply heading into the country’s October 4 presidential election, and that gap between the numbers and the national feeling has become the central storyline of President Lula’s bid for an unprecedented fourth term.
Brazil’s economy under Lula has avoided recession, maintained low unemployment, and delivered real wage gains — genuine achievements economists point to directly.
But the picture is decidedly mixed rather than straightforwardly positive. Inflation sat around 5.2% in mid-2025, well above the Central Bank’s official 3% target and its 4.5% tolerance ceiling. The Selic benchmark interest rate currently stands at 14.00% annually, among the highest in the G20, after the Central Bank began a cutting cycle earlier in 2026 to try to bring inflation under control.
The World Bank cut its 2026 Brazil growth forecast to a disappointing 1.6%, and the country’s fiscal deficit breached 7% of GDP in 2025, with public debt now standing around R$1.7 trillion.
The timing of the latest growth data is politically awkward for Lula specifically: economists expect just 0.2% quarter-on-quarter GDP growth in the upcoming official reading, down sharply from 1.1% in the prior quarter — a visible deceleration arriving just as Lula campaigns on the strength of his economic record.
Why Voters Aren’t Feeling It
The disconnect between macroeconomic performance and public sentiment has been persistent and well-documented. In an earlier reading this year, just 32% of Brazilians rated the economy as good, against 54% who called it bad, and three-quarters of respondents ranked inflation among their biggest economic worries.
Food prices in particular have become the emotional center of the economic debate: in Brazil, picanha — a premium cut of beef central to the traditional barbecue — has become informal shorthand for whether Lula has delivered on his 2022 promise to raise living standards, a promise many voters believed based on his first two terms (2003-2010), when his policies helped cut poverty in half.
Restaurant worker Angélica Pinheiro summarized a common sentiment to the Christian Science Monitor: the Workers’ Party (PT) “comes and goes, but nothing changes much.”
Opposition lawmakers have leaned directly into the frustration, donning hats bearing the slogan “Make food cheap again” during a congressional session earlier this year.
Lula’s Policy Response
Facing that gap between data and sentiment, Lula has shifted his stated priorities from boosting growth toward slowing the inflation his own government’s spending has helped fuel, while trying to contain food costs without reigniting the kind of investor fears that battered Brazil's currency previously.
His campaign platform centers on continuity: expanding the Bolsa Família income transfer program to cover 21 million families, a R$700 billion stimulus package, reform of Brazil’s “6×1” work schedule system, and continued critical minerals diplomacy — an area that has taken on new significance amid this year’s rare earths agreements with the United States.
Critics have characterized the R$700 billion stimulus and 24,000 newly created federal positions as election-year spending designed to boost short-term sentiment ahead of the vote.
Political science professor Marta Arretche, of the University of São Paulo, offered a more structural critique of Lula’s current term compared to his earlier ones: unlike in the 2000s, “it has not been a government marked by innovations, by the launch of great programs.”
The Political Stakes
Lula, who will turn 81 in October 2026, is seeking what would be an unprecedented fourth presidential term in Brazilian democratic history. His path there has been unusually turbulent even by his own standards: imprisoned on corruption charges in 2018 that were later annulled, he won back the presidency in 2022 by just 1.8 percentage points over Jair Bolsonaro, and survived emergency brain surgery in 2024 following a subdural hematoma.
His principal opponent, Senator Flávio Bolsonaro, formally accepted the Liberal Party’s nomination at its July 25 convention in São Paulo, running in his father’s place after Jair Bolsonaro’s own coup conviction barred him from the ballot.
Flávio’s economic messaging has leaned heavily on direct, visceral comparison: a regular feature of his campaign involves videos of him walking through supermarkets, reacting to prices, and drawing contrasts with costs during his father’s presidency.
Restaurant worker Bruno Meirelles, who said the economy “felt better under Jair Bolsonaro,” plans to vote for Flávio in October.
Where the Polls Stand
Late-August first-round polling shows Lula leading every survey, by margins ranging from two to eight points over Flávio Bolsonaro, with self-help author Augusto Cury emerging as a genuine surprise in third place, having jumped from just 1% support to as high as 11% during August.
No late-August poll puts Lula near the outright majority he’d need to avoid a runoff, and given that every Brazilian presidential election since 2002 has gone to a second round, a repeat is considered very likely. Critically, runoff simulations between Lula and Flávio are consistently shown as tied within the margin of error — meaning Brazil’s first-round result may offer only a partial picture of the race’s true competitiveness.
Regional polling adds further texture: AtlasIntel data from April showed Flávio actually leading Lula in Minas Gerais, a key battleground state Lula narrowly won by just 0.4 points in 2022 — a reversal that, if it holds, would represent a meaningful erosion of Lula’s 2022 coalition in exactly the kind of swing state that decides close Brazilian elections.
What a Fourth Lula Term Would Likely Mean Economically
Analysts describe a fourth Lula term as likely the least disruptive economic path available to Brazil, continuing the same broad economic approach and largely the same economic team, anchored by the Finance Ministry’s existing projections — which already function, in practice, as a draft budget for a potential fourth term.
But that continuity carries costs that don’t reset simply because Lula wins reelection: Brazil’s spending framework has already bent once under his current term, interest rates remain among the highest in the G20, and the food-price inflation voters feel directly in daily life would not disappear on any new inauguration day, regardless of which candidate takes office.
With Brazil’s second-quarter GDP figures due imminently and expected to show sharp deceleration, and with security, corruption, inflation, and affordability all ranking among voters’ top concerns alongside the country’s relationship with the Trump administration over tariffs and gang terrorist designations, the coming weeks will test whether Lula’s economic record — genuine growth and low unemployment, but persistent inflation and fiscal strain — can hold up against a challenger whose entire economic message is built on convincing Brazilians that they were better off before.
