Brazil elects Bolsonaro as new president

30 October 2018

What has happened?

On 28 October 2018, Brazil elected far-right congressman and former army captain Jair Bolsonaro as president. Bolsonaro, who ran for the Social Liberal Party (PSL), secured over 55% of the vote against Fernando Haddad of the left-wing Workers’ Party (PT). He will take office on 1 January 2019.

While Bolsonaro is a highly controversial figure, having praised Brazil’s military dictatorship and been charged by the country’s public prosecutor with inciting hatred, his election illustrates the dissatisfaction with rising crime and a political class tarnished by corruption scandals. The Brazilian stock market and the real have rallied on expectations that Bolsonaro will implement a liberalising economic agenda.

What are the risks and opportunities for investors?

  • Prospect of Pro-market Reforms: Bolsonaro’s economic adviser, Paulo Guedes, is likely to pursue market-friendly measures including privatisation and pension reform. Following his victory, Bolsonaro affirmed his commitment to tackling the country’s budget deficit.
  • Governability: However, 30 parties are represented in the lower house of Congress and 21 in the Senate. The highly fragmented nature of Congress will complicate attempts at implementing reforms.
  • Risk of Social Unrest: Pension reform and privatisation plans are opposed by labour unions and would be likely to provoke protests. In addition, Bolsonaro’s pledges to liberalise gun ownership and increase the powers of the police to kill suspected criminals are likely to increase extrajudicial killings, which will also increase the likelihood of demonstrations in major cities.

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For further information, please contact Eleanor Smith, Senior Political Risk Analyst on +44 (0)121 626 7837 or email