Lula Wins Brazil Runoff in Split Mandate

Luiz Inácio Lula da Silva secured his fourth term as president of Brazil on Tuesday, defeating Flávio Bolsonaro in a runoff that left the country with a divided government. Lula received 64,256,232 votes compared to Bolsonaro’s 59,826,041, a margin of more than 4.4 million ballots. The victory allowed the left to retain the presidential palace, yet it failed to secure control of the legislative branch in Brasília.

Conservative forces gained ground in Congress, complicating Lula’s path forward. Bolsonaro’s Liberal Party captured 121 seats in the lower chamber and 28 in the Senate. Gilson Schwartz of the University of São Paulo estimates that the broader right now commands approximately 59% of the Chamber of Deputies. Schwartz described the result as a divided government rather than a unified left-wing regime, noting that voters supported Lula for social stability while backing conservative candidates on fiscal and cultural issues.

Financial markets reacted sharply to the outcome. The Ibovespa index dropped 13.88% on Monday, and the US dollar gained more than 8% against the Brazilian real. Igor Barenboim, a former Brazilian economic policy secretary, attributed the selloff to traders unwinding positions taken after Bolsonaro led the first round. Barenboim noted that government debt rose from 72% to 83% of gross domestic product during Lula’s previous term. He projected that the primary deficit remains close to half a percentage point of GDP, with the nominal deficit reaching roughly 9% when high interest rates are included.

Bolsonaro departed for the United States on Tuesday, two days after the election. He failed to surrender his passports as ordered in a separate money-laundering investigation, though he denies wrongdoing. A senior US official stated that Bolsonaro and his family would be granted visas, although Washington did not formally grant asylum. Bolsonaro initially claimed voting errors warranted annulment but later shifted his argument to allege abuse of power against the Lula ticket. Only about 34,300 ballots were cast after the original closing time, a number far below Lula’s winning margin.

The election outcome also affects Brazil’s relationship with Israel. Bolsonaro had pledged to move the Brazilian Embassy from Tel Aviv to Jerusalem and expand defense cooperation. Lula, who has supported Palestinian statehood, offers no such opening. Neither country currently has an ambassador posted in the other’s capital. Brazil sold approximately $569 million in goods to Israel in 2025 and bought roughly $1.3 billion. Agricultural sales to Israel from January through September 2026 already exceeded the total for all of 2025.

Lula’s victory was acknowledged by right-wing and center-right leaders in Chile, Peru, Ecuador, and Colombia. These governments still rely on Brazil for cooperation on border security, energy, and migration. Schwartz warned that Bolsonaro’s departure may strengthen his symbolic position among radical opposition members while reducing his day-to-day management of the conservative bloc in Congress.