DOMESTIC POLITICS: The October 2010 presidential election is currently too close to call, but either of the front-runners would maintain the prudent macroeconomic policies that have characterised Brazil since the mid-1990s. With an economic recovery now under way, and public spending set to rise, the performance of the economy is now more likely to favour the ruling PT in its bid to secure a third term. Lula remains highly popular, but is constitutionally ineligible to stand for a third consecutive term and has ruled out trying to change this. His preferred successor is Ms Rousseff, the presidential civil chief of staff. Mr Serra, the likely candidate of the centrist opposition PSDB, currently leads in the polls with around 35% of voting intentions thanks to greater public recognition and a respected track record as Sao Paulo governor since 2007; Ms Rousseff has so far languished below 20% of voting intentions, close to a third contender, Ciro Gomes of the centre-left Partido Socialista Brasileiro (PSB), because of a much lower level of public recognition than Mr Serra or Mr Gomes, but Ms Rousseff's profile will rise as campaigning gets under way in earnest. The PT's main coalition ally, the centrist Partido do Movimento Democratico Brasileiro (PMDB), has backed her bid and she will gain its share of media campaign time. The extent to which Lula can transfer his popularity will be crucial; this will also depend on Ms Rousseff's campaigning skills.

Source: Brazil: Country outlook

Source: Country Forecast Brazil August 2009

Source: EIU Country Data