SAO PAULO: Brazilian President Luiz Inacio Lula da Silva won a historic fourth term on Sunday, the country’s electoral court said, in a shock result that defied polls, precedent and global anti-incumbent sentiment and put the brakes on a wave of right-wing election victories across Latin America.

His opponent, Senator Flavio Bolsonaro, the eldest son of former President Jair Bolsonaro, refused to accept defeat and said he would seek to have the result annulled following a Sunday ruling by a Supreme Court justice that extended voting by two hours.

Bolsonaro led the first round of the election but lost the runoff by more than 4 million votes, rattling Brazilian financial markets that had bet on his victory. His refusal to concede echoed his father’s reaction after losing to Lula in 2022.

Jair Bolsonaro never accepted his defeat and was later sentenced by the Supreme Court to 27 years in prison for plotting a coup to remain in power.

The scale of Flavio Bolsonaro’s loss to Lula, by more than twice his father’s losing margin, and the fact that his campaign had also requested an extension because of rain in the conservative-leaning south make any annulment unlikely, analysts said.

Mario Braga, a Latin America analyst at risk consultancy RANE, said there could be right-wing protests in the coming days, but “it’s very improbable that it will lead to the reversal of the result”.

Comeback

Investors expect recent bets on a change of government to unwind during a volatile week on financial markets. A Tokyo-listed exchange-traded fund tracking Brazil’s Bovespa index plunged nearly 15% in Asian trading on news of Lula’s victory, while the Brazilian real was set to fall sharply against the US dollar.

The victory marks another comeback in a career full of them for Lula, an icon of the global left and the most dominant force in Brazilian politics this century. The 80-year-old was jailed from 2018 to 2019 on corruption charges that were later overturned, paving the way for him to defeat Jair Bolsonaro in the 2022 election.

“He is a statesman, a giant,” leftist federal lawmaker Erika Hilton, who was with Lula in Sao Paulo during the vote count, told Reuters.

At times, Lula’s re-election appeared a long shot as voters soured on him and his Workers’ Party after years of corruption scandals and rising prices. Sweeping social changes also left the former metalworker and union leader looking out of touch with an increasingly app-based economy and its growing ranks of informal workers.

Pollsters said better-than-expected turnout had powered Lula to victory. Leonardo Barreto, co-founder of consultancy Think Policy, said voters had chosen Lula’s familiar embrace over Bolsonaro’s novelty.

“People today are choosing between change, with some apprehension, and a known path, which guarantees certain rights,” he said.

During the campaign, Lula pointed to a record of falling poverty and inequality, while unemployment, illiteracy and deforestation reached record lows during his third term.

He warned that Bolsonaro would cut welfare spending, reverse social advances and hand over Brazil’s sovereignty to US President Donald Trump, whose State Department led a campaign to return the Bolsonaros to power.

Lula’s victory deprives Trump of a major addition to a growing bloc of friendly right-wing Latin American governments that have embraced Washington’s agenda on security and migration.

There was no immediate comment from Trump or the US State Department, while Canadian Prime Minister Mark Carney and Latin American leaders were quick to offer their congratulations.

Celso Amorim, a former Lula foreign minister, told Reuters the leftist “would be very important for establishing a point of balance in Latin America. Lula is that balance.”

Late-campaign boost

Lula becomes the first candidate since Brazil’s return to democracy in the 1980s to be elected after finishing second in the first round.

His campaign this year combined the pragmatism and populism that have shaped his career in national politics for half a century, rolling out a series of reforms aimed at improving the lives of workers and poorer Brazilians.

These gained momentum with late-campaign pledges ranging from free nationwide public transport at weekends, which must be formally submitted to Congress, to a 15% increase in his signature welfare programme, which is already being implemented.

Lula also championed a constitutional amendment that became Brazil’s biggest labour reform in decades and passed with broad support in Congress.

Challenges ahead

Lula’s fourth term could nevertheless be his most difficult yet after Brazil elected its most conservative Congress since returning to democracy in the 1980s.

Combined, Bolsonaro’s Liberal Party and allied parties could control more than 280 seats in the lower house and up to 50 seats in the Senate, giving the opposition comfortable majorities in both chambers.

That could deepen the recent trend of presidents ceding power to Congress over the budget, major legislation and key nominations.

Lula also faces an economy that his government forecasts will grow by just 2.3% next year, adding to fiscal concerns surrounding high interest rates and public debt that has risen above 82% of GDP, its highest level since the pandemic.

Goldman Sachs said it expects Lula to make, at most, modest progress in containing spending during a fourth term as he remains committed to a state-led growth model.

Surging household debt is another concern for economists. Seeking to address the issue, Lula introduced a provisional ban on online betting and unveiled a new debt-relief programme during the campaign.

The incoming right-wing Congress will seek to pass structural reforms favouring businesses, experts said, potentially prompting spending cuts that could trigger a popular backlash.