Big Win For Lula, But Reform Outlook Still Uncertain

October 2006 | Political Risk Analysis

BMI View: President Luiz Inacio Lula da Silva resoundingly defeated the PSDB's Geraldo Alckmin in the second round of the presidential election on October 29, as we had expected. Now that the pieces of the electoral puzzle are in place, we look ahead to the next four years, and reiterate our view that the reform outlook in Lula's second term will hinge upon a delicate political balance in the legislature. A shift to the left is a possibility, but further deadlock is the most probable outcome.

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