In Brazil, cost-of-living frustration undermines Lula's reelection bid
EWZ•Cost-of-living frustration is weighing on President Luiz Inacio Lula da Silva's reelection bid, despite falling inflation and low unemployment. Household debt service excluding mortgages reached a record 26.6% of income in June, while a September poll found nearly half of Brazilians said the economy had worsened over the past year.
1. Economic strain weighs on voters
Voters interviewed in Sao Paulo described years of rising food prices and pressure on household budgets as reasons they oppose Lula's bid for a fourth term. A September Quaest poll found nearly half of Brazilians said the economy had worsened in the past year, compared with 19% who said it had improved.
2. Debt and prices remain concerns
Food inflation has slowed, and prices fell from June to August, but years of increases have left food prices well above pre-pandemic levels. Household debt service excluding mortgages reached a record 26.6% of income in June, according to central bank data; Brazil's benchmark interest rate was 13.75%.
3. Campaigns offer different proposals
Lula announced a 15% increase in a welfare program and an executive order banning online betting from October 6. Senator Flavio Bolsonaro has campaigned on lowering food costs through tax cuts and other measures, while Lula has pointed to farm output, government food stocks and expanded rural credit.
