‘Democracy always’: Lula vows no return to dictatorship in Brazil after election win
Leaders and governments worldwide congratulate Lula on dramatic comeback seen as an important signal to rest of Latin America Luiz Inácio Lula da Silva , the Brazilian president, has vowed that dictatorship and fascism will never return to Brazil after winning a historic fourth term in power by defeating his far-right opponent, Flávio Bolsonaro . “This is God’s work – and it’s thanks to all of…
Brazilian markets experienced a sharp reaction to the recent election outcome, as Luiz Inácio Lula da Silva, known as Lula, secured victory in the run-off and reclaimed the presidency. Commerzbank’s Volkmar Baur noted that the Brazilian Real (BRL) dropped around 10% against the US Dollar, reaching a level of around 5.50 per Dollar.
The drop came as markets reacted to Lula's limited fiscal room due to a high public debt of 83% of GDP and a budget deficit of around 10%. Lula has pledged fiscal consolidation in recent weeks, but he faces a challenge in delivering on his promises, particularly with a more conservative Congress now in place following the parliamentary elections in early October.
The crucial factor for the Real will be how quickly Lula can reassure investors about the credibility of his reform and consolidation pledges.
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