Brazilian President Luiz Inacio Lula da Silva won a historic fourth term Sunday, the electoral body announced, defying polls and regional anti-incumbent trends to halt a wave of right-wing victories across Latin America.
His opponent, Sen. Flavio Bolsonaro, the eldest son of former President Jair Bolsonaro, refused to accept defeat and said he would ask for the result to be annulled because a Supreme Court justice's Sunday ruling extended voting by two hours.
Bolsonaro led the election's first round but lost in the runoff by more than 4 million votes, rattling Brazilian financial markets that had bet on his victory.
His refusal to concede defeat echoes his father's reaction after losing to Lula in 2022. Jair Bolsonaro never accepted his loss 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 (more than twice his father's losing margin) and the fact his campaign also asked for an extension because of rains in the conservative-leaning south make any annulment unlikely, analysts said.
Mario Braga, a Latin America analyst at the risk consultancy RANE, said there could be right-wing protests in coming days, but "it is very improbable that it will lead to the reversal of the result."
Investors expect recent bets on a change of government to unwind in a volatile week ahead on financial markets. A Tokyo-listed exchange-traded fund tracking Brazil's Bovespa index plunged nearly 15% in Asia trade on news of Lula's victory, while the Brazilian real was set to fall sharply against the U.S. dollar.
The victory marks another comeback in his career 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 beat 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 reelection seemed like a long shot, as voters soured on him and his Workers' Party after years of corruption scandals and rising prices, while sweeping social changes 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, the 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 track record of falling poverty and inequality, while unemployment, illiteracy and deforestation hit record lows during his third term.
He warned Bolsonaro would cut welfare spending, backslide on social advances and hand over Brazil's sovereignty to U.S. President Donald Trump, whose State Department led a campaign to get the Bolsonaros back to power.
Lula's win deprives Trump of a major addition to what has been 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 U.S. 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."
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 mixed the kind of pragmatism and populism that has shaped his career in national politics for half a century, rolling out a slew of reforms aimed at improving the lives of workers and poor Brazilians.
These gained steam with late-campaign pledges that ranged from free nationwide weekend public transport (a measure requiring formal submission to Congress) to a 15% increase in his trademark welfare program that is already being implemented.
Lula also championed a constitutional amendment that became Brazil's biggest labor reform in decades, passing with wide support in Congress.
Still, Lula's fourth term could 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, enough for comfortable opposition majorities in both chambers.
That may deepen recent trends of presidents ceding power to Congress on the budget, major legislation and key nominations.
Lula faces an economy that his government forecasts will grow just 2.3% next year, adding to fiscal concerns tied to high interest rates and public debt that has risen past 82% of GDP, the highest since the pandemic.
Goldman Sachs said it expects Lula to make modest progress at most to contain spending in a fourth term, as he stays committed to a state-led growth model.
Surging household debt also concerns economists. Trying to address the issue, Lula rolled out a provisional ban on online betting and unveiled a new debt relief program during the campaign.
The incoming right-wing Congress will try to pass structural reforms that favor businesses, experts say, prompting spending cuts that could trigger popular backlash.
