Lula Thwarted: Second Round Implications

October 2006 | Political Risk Analysis

President Luiz Inacio Lula da Silva fell short of a first-round victory in the presidential election, attracting 48.61% of the vote. He will face off on October 29 against the PSDB's Geraldo Alckmin, who received a surprisingly high 41.64% of the vote. BMI View: Lula is still the favourite to capture the presidency, in our view. But the tighter-than-expected first-round result in some ways represents the worst-case outcome from a reform perspective, and the additional month of campaigning will work in Alckmin's favour. We have revised down our short-term political risk rating from 71.0 to 69.0 as a result.

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