Economy Looms Large Over Brazil's Elections

WASHINGTON, D.C. -- With economic activity recovering steadily since the COVID-19 pandemic, unemployment falling to its lowest level in nearly seven years and consumer prices finally edging downward, Brazil's economic picture is looking much brighter as voters head to the polls this week.

The spate of recent good economic news may bolster the odds for incumbent President Jair Bolsonaro, who currently trails the popular former President Luiz Inacio Lula da Silva in most polls. However, Gallup surveys in Brazil in late July and early August show healthy doses of economic optimism and skepticism among the electorate. The good news may be too little, too late for some Brazilians.

Majority of Brazilians Optimistic About Their Living Standards: Brazil's economy began to recover in 2021 and continues to do so this year, with current growth for 2022 forecast at 2.7%. On the back of this growth, as well as a new $7.6 billion aid package to help ease inflation woes among poor Brazilians, a majority of Brazilian adults (58%) say their standard of living is getting better, while 22% say it is getting worse. These numbers are slightly improved from where they were in 2021 and in line with sentiment in 2020.

Throughout Bolsonaro's first term, the majority of Brazilians have been upbeat about their living standards, but notably not nearly to the same level as they were throughout da Silva's presidency -- which da Silva may be able to capitalize on.

One in Three Brazilians Struggling to Afford Food: After spending most of 2021 and much of 2022 in the double digits, annual inflation dropped to about 9% in August, as transport, food and housing prices started to fall.

Still, food prices remain high, which is reflected in the 34% of Brazilians who said they struggled to afford food at times in the past year. More Brazilians have been unable to afford food at times in the past two years under Bolsonaro than at most points in the past 15 years.

Brazilians Remain Pessimistic About Job Market: Although Brazil's jobless rate fell to 9.1% this summer -- its lowest level in nearly seven years -- the majority of Brazilians (56%) still think it is a bad time to find a job where they live. Four in 10 Brazilians see it as a good time.

Overall, Brazilians remain pessimistic about job prospects, but they are not nearly as pessimistic as they were when Bolsonaro took office or compared with the years immediately following the country's economic crisis in 2014.

Less Than Half See Local Economic Conditions Improving: The optimism that Brazilians feel about their living standards and other economic metrics may be fragile. At the same time that Brazilians feel their personal situation is getting better, they are less optimistic about the direction of their economy than they were in the past two years. In fact, the 49% of Brazilians who see local economic conditions as improving is the same as Bolsonaro's first year in office.

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