Lula da Silva has been declared the winner of the Brazilian election, in a result that will send shockwaves throughout South America.
The left-wing candidate defeated Senator Flavio Bolsonaro, the eldest son of former President Jair Bolsonaro. The senator had finished first in the election's first round and hoped to revive his father's far-right movement.
He has now refused to accept defeat and said he would ask for the result to be annulled due to a Sunday ruling from a Supreme Court justice that extended voting for two hours.
His loss in the runoff by over four million votes has rattled Brazilian financial markets, which had bet on his victory.
His refusal to concede defeat has echoes of 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 – by more than twice his father's losing margin – and the fact his campaign also asked for an extension due to 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's 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 dived nearly 15 per cent in Asia trade on news of Lula's victory, while the Brazilian real was set to fall sharply against the US dollar.
At times, Lula's reelection looked like a long shot, as voters soured on him and his Workers' Party after years of corruption scandals and rising prices, while sweeping societal 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.
Lula's victory marks another comeback in a career full of them.
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
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 US 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.
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 became the first candidate since Brazil’s return to democracy in the 1980s to win the presidency after finishing second in the first round of voting.
His campaign blended the pragmatism and populism that have defined his five-decade career in national politics, with a series of reforms designed to improve conditions for workers and poorer Brazilians.
Momentum gathered towards the end of the campaign, with pledges including free public transport nationwide at weekends, a proposal that must be formally submitted to Congress, and a 15 per cent increase in his flagship welfare programme, which is already being implemented.
Lula also backed a constitutional amendment that became Brazil’s biggest labour reform in decades and was passed with broad support in Congress.
His fourth term could prove to be his most challenging yet, with Brazil having elected its most conservative Congress since the country returned to democracy in the 1980s.
Bolsonaro’s Liberal Party and its allies could together hold more than 280 seats in the lower house and up to 50 in the Senate, giving the opposition comfortable majorities in both chambers.
This could accelerate the recent trend of presidents relinquishing powers to Congress over budget decisions, major legislation and key appointments.
Lula also faces an economy that his government expects to grow by just 2.3 per cent next year, alongside mounting fiscal pressures from high interest rates and public debt that has exceeded 82 per cent of gross domestic product, its highest level since the pandemic.
Goldman Sachs expects Lula to make, at most, modest progress in curbing public spending during his fourth term, as he remains committed to a state-led growth model.
Rising household debt is another concern for economists. In an effort to tackle the problem, Lula introduced a provisional ban on online betting and announced a new debt-relief programme during the campaign.
Experts say the incoming right-wing Congress will seek to pass structural reforms favouring businesses, potentially leading to spending cuts that could provoke a public backlash.
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