President Luiz Inacio Lula da Silva celebrates with his running mate Geraldo Alckmin after winning a fourth term in the presidential election runoff in São Paulo, Brazil, on October 25, 2026.
Luiz Inacio Lula da Silva won a fourth presidential term in the runoff on October 25, defeating right-wing candidate Flávio Bolsonaro, the eldest son of former far-right president Jair Bolsonaro, with 51.79 percent of the valid votes.
Lula's win, however, cannot hide how polarized Brazil was during and after the election. In the first round, Flávio Bolsonaro led with 47.03 percent of the valid votes against 45.16 percent for Lula, a sign of the right's substantial voter base.
The contest grew fiercer in the runoff. Under the pressure of this decisive vote, Lula shored up his traditional base in the Northeast while broadening his appeal by bringing together diverse political forces and courting centrist voters. He put everyday concerns such as social welfare, employment and the cost of living at the heart of his campaign.
Even in defeat, Flávio Bolsonaro, who has left Brazil for the United States, took 48.21 percent of the valid votes in the runoff. More importantly, Brazil's right wing has strengthened its hold on Congress. Right-wing and center-right parties hold some 303 seats in the new Chamber of Deputies, 59 percent of the total, while left-wing parties have about 124 seats, or 24 percent. The Liberal Party, to which the Bolsonaro family belongs, holds 121 seats on its own.
Despite squeaking through the runoff, Lula has no majority in Congress to match. He will have to win over centrist lawmakers, local political blocs and other parties to push legislation through and carry out his policies, which makes coalition-building both a necessity and a test of his fourth term.
The incumbent president can take some comfort from the country's macroeconomic data. Brazil's GDP reached R$12.7 trillion in 2025, up 2.3 percent year on year, the fifth straight year of growth for the largest developing country in the Western Hemisphere.
The International Monetary Fund recently projected that, on the back of strong growth, expanding investment and robust domestic demand, Brazil's GDP will reach approximately $2.64 trillion in 2026, making it the world's tenth-largest economy, and some $2.8 trillion in 2027, when it will overtake Italy and Russia as the eighth-largest.
In the short term, though, there are warning signs. The Brazilian stock market plunged on October 26, triggering a circuit breaker, and the real fell sharply. Markets are now repricing Brazilian assets and weighing the risks of the incoming administration's fiscal policy.
Data from the Central Bank of Brazil show general government gross debt rising from 78.7 percent of GDP in January to 82.6 percent in September this year. The rise lays bare the fiscal challenge of Lula's fourth term: how to prioritize public spending and use public funds more efficiently.
The new administration needs to meet people's immediate needs while continuing to support long-term development goals such as infrastructure, industrial upgrading and the green transition.
In his victory speech in São Paulo, Lula declared "we are no one's backyard," a line that thanked the supporters who backed him against his rival and, more than that, restated his long-standing commitment to strategic autonomy in foreign policy.
Faced with the Donroe Doctrine, Lula may take a more flexible approach to the United States and neighboring countries. Several Latin American countries, such as Argentina, Chile, Colombia, Peru and Panama, have been governed by right-wing and conservative administrations in recent years. That will test the left-wing leader's diplomatic skill.
During his third term, Lula found an effective way to mitigate the risks posed by the Donroe Doctrine, above all Trump's tariffs: the Southern Common Market (Mercosur).
After 25 years of negotiations, EU member states voted in January to approve the signing of the Mercosur-EU Free Trade Agreement. The deal took provisional effect on May 1, with both sides beginning to phase out tariffs on certain products. With a combined population of approximately 720 million and a total GDP of $22 trillion, the two regions will form one of the world's largest free trade areas. The Mercosur-Singapore Free Trade Agreement, meanwhile, will take full effect on November 1 this year, helping Brazil find more trading partners in the face of possible tariff risks.
As a member of BRICS, the G20 and the United Nations, Brazil also has multilateral platforms for engaging with issues such as sustainable development, the global financial system and climate change.
In 2024, during Lula's third term, China and Brazil elevated their relationship to a "China-Brazil community with a shared future for a more just world and a more sustainable planet."
Brazil is China's ninth-largest trading partner, while China is Brazil's largest trading partner. China Customs figures show that bilateral trade exceeded $187 billion in 2025.
In early 2023, China and Brazil signed a memorandum of understanding on establishing a renminbi (RMB) clearing arrangement in Brazil, making it easier to settle bilateral trade in local currencies.
Author | Zhang Ruijun
Photo | CFP
