Elections in Brazil: Far-right candidate wins

01 November

The conservative candidate Jair Bolsonaro won the presidential elections with a majority of 55.2% of votes against 44.8% for Fernando Haddad of the left-wing Workers’ Party.

Bolsonaro promises to lower Brazil's public deficit, reduce debt and trim the public sector. The main priorities are to implement policies to boost investment, improve investor confidence, promote economic growth and fix the bloated pension system.

How does he plan to do this?

Increasing the age of retirement, modifications to the contributions scheme and private retirement alternatives are just a few of the possibilities given by this candidate to lessen the current fiscal burden.

A former army captain, Bolsonaro has pledged to fight crime and corruption.  After 4 years of criminal investigations and uncovered massive corruption, his supporters believe this is ‘a much-needed change to the country’ and that order needs to take place.

A divided nation, much like the UK with Brexit, some see Bolsonaro’s victory as a threat to Brazil’s economy, social stability and safety. On the other hand, he’s seen by some as a route for improved economic confidence, just in the way Trump has had an effect in the US, at least to the bottom line.

By voting in Balsonaro, the world’s eight largest nation, one of the most exciting emerging markets, has now opted for military and economic discipline. This is a trend that seems to be growing in every continent, with an increasing rise of right-wing politicians. A swing to the right, feared by many, with an outcome yet to be seen.

The immediate effects

Stock Exchange

Brazil stocks outperformed the rest of the world after the elections, their best results in over one year.

Brazil's Bovespa index is up by more than 8 per cent in October. The iShares MSCI Brazil ETF (EWZ) — which tracks Brazilian shares — has skyrocketed more than 18 per cent this month, the highest since March 2016.

Whilst confidence in Brazil is growing at a healthy rate, the real question for markets now is whether Bolsonaro’s administration will be able to keep these gains or not.


After a sustained drop over the last year, the Real has rebounded by 16.75% in the last 6 weeks. A combination of potentially more confidence in Brazil’s economy with the elections and continued uncertainty across the European zone with Brexit.

What does this mean for Brazilians who have been leaving the country?

Brazil’s wealthiest, best and brightest have been fleeing to other countries in thousands in the past few years. From wealthy Brazilians to bankers, doctors, lawyers and TV stars, many have decided to leave Brazil or invest in a second home.

Shaken by the ever-growing violence in the country and fear of the country’s political, economic and social future, many have decided to look back towards Europe as a medium to long-term destination.

Will this trend change now?

The results of the elections won’t make this trend fade away. If anything, it’s likely to spur on those who have been looking elsewhere as the future of Brazil is still very uncertain.

Investing in Europe will continue one of Brazilians’ first options, with Lisbon in Portugal being one the favourite destination. In fact, Brazilians are the fastest growing investors in Portugal, right after the Chinese, with a growth rate of 300.71% from March 2016 to June 2018.

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