Industry Picking Up?

October 2006 | Ratings Update

President Lula's failure to secure a first-round round victory in the October election has not only weighed on his chances of a second round victory, but has also cast a pall on the domestic political environment. Whether Lula or his opponent in the second round, Geraldo Alckmin, end up winning, the victor is likely to come into office with a weakened mandate. This, coupled with a highly splintered congress, has fuelled concerns over the next government's ability to pass crucial reforms. As such, these developments have led us to revise our short-term political ratings downwards.

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