ELECTION WATCH: Ms Rousseff's aspirations to stand again in October 2014 would be impaired by unexpected economic difficulties, splits within her coalition, and a failure to upgrade healthcare or improve Brazil's rickety transport infrastructure ahead of the football World Cup in 2014. A return of the former president, Luiz Inácio Lula da Silva (who is not barred from standing in 2014), is possible, but even assuming that his treatment for throat cancer proves successful he may well prioritise his health over frontline politics. If Brazilians begin to tire of the PT after 12 years in government, a charismatic senator-elect, Aécio Neves of the more centrist Partido da Social Democracia Brasileira (PSDB), would be well placed to run on a platform of "change", but would need to win over the powerful PSDB bloc in São Paulo state. Also, if the PSD allies with the Partido Socialista Brasileiro (PSB), forming a powerful third force in politics, it may be in a good position to challenge the PT, perhaps through a bid by Eduardo Campos (the PSB governor of the state of Pernambuco), especially should both Ms Rousseff and Lula prove unable or unwilling to run. The municipal elections in October 2012 will also be an important test of the current balance of power within the ruling alliance (especially among the PMDB and PT) and among political forces ahead of the presidential election. The PSDB, reeling from its third consecutive loss at the last presidential race, would be weakened further should it lose the São Paulo mayoralty race. The main opposition ally, the right-wing Democratas, is a party in decline.

Source: Brazil: Country outlook

Source: Country Forecast Brazil August 2011

Source: EIU Country Data