Brazil’s debt-strained households face a tight Lula–Bolsonaro election

Brazil’s economy has grown and extreme poverty has fallen, but many households are still squeezed by the cost of paying their debts. That gap between national progress and everyday pressure hangs over the presidential election on October 4, with incumbent Luiz Inacio Lula da Silva facing Senator Flavio Bolsonaro. According to Al Jazeera, polls give Lula a narrow first-round lead but point to a near tie if the contest goes to a second round.

The economic record offers both encouragement and frustration. A report by the Center for Economic and Policy Research, a left-leaning US think tank, found that extreme poverty fell by about 40% between 2022 and 2024. Unemployment reached historic lows, and growth outpaced most neighbouring countries. Yet the same analysis found a sharp increase in debt-servicing costs — the money households spend keeping up with their borrowing. Concerns about living costs have persisted despite low inflation during Lula’s current term.

Two competing economic pitches

Lula, 80, is seeking a fourth, non-consecutive term as the Workers’ Party candidate. His political record centres on social programmes aimed at improving life for poorer Brazilians and reducing inequality. He has also pursued stronger ties among developing, non-Western countries. Flavio Bolsonaro, 45, the Liberal Party candidate and eldest son of former President Jair Bolsonaro, has promised to curb inflation and public spending. An adviser said he would introduce a debt ceiling, a limit on government borrowing, if elected.

Voters appear divided over which candidate can address their concerns. Polls cited by Al Jazeera put Flavio Bolsonaro ahead on inflation, corruption and crime, while Lula scores better on poverty, inequality, foreign affairs and health. A September 7 Quaest survey found that violence was the biggest concern for 31% of respondents, followed by corruption at 20%, the economy at 19% and health at 12%. The economy matters, but it is competing with immediate fears about security and trust in public institutions.

September polls underline the closeness of the race. Quaest put Lula at 37% against Bolsonaro’s 33%, while AtlasIntel showed 46% against 43%. Datafolha recorded 40% for Lula and 36% for his challenger. Andre Pagliarini, an assistant professor at Louisiana State University, told Al Jazeera that the campaign was marked by limited enthusiasm and sharply opposing views of Brazil’s recent history.

“The stakes of this election are incredibly stark because the candidates stand for such opposing visions about what Brazil’s recent history means,” Pagliarini told Al Jazeera.

Banking scandal and US pressure

A scandal surrounding banker Daniel Vorcaro has added pressure across the political spectrum. Reports cited by Al Jazeera said Flavio Bolsonaro sought substantial funding from Vorcaro for a documentary about his father. Lula’s former finance minister, Guido Mantega, said he helped arrange a meeting involving Vorcaro, Lula and the central bank chief to discuss banking policy. Reuters confirmed the meeting. Lula said he had ruled out political interference in the bank’s case and left the investigation to the central bank.

Relations with Washington add another economic stake. Flavio Bolsonaro has promised close cooperation with US President Donald Trump’s administration. Trump imposed heavy tariffs on Brazil in an effort to have the case against Jair Bolsonaro dropped, and sanctioned members of the judiciary involved. The former president is serving a 27-year sentence over a coup plot following his 2022 defeat. Lula’s government has warned Washington against interference in Brazil’s domestic affairs.

The next test is the October 4 vote. If no candidate wins outright, the leading two will contest a run-off on October 25. The result will determine whether Lula continues his social-policy agenda or Bolsonaro gets the chance to pursue his spending and inflation pledges, alongside a closer relationship with Washington.