The Economist reports on Pre-election spending in Brazil
A final splurge

The primary deficit (before interest payments) reached 14.4 billion reais ($5.9 billion) in that month, the fourth in a row in which the government has failed to put aside cash to pay creditors. The consolidated primary surplus in the eight months to August stood at just 0.3% of GDP. Most of that came from the states; the central government managed just 1.5 billion reais, a piffling 0.05% of GDP and the worst result for the period since 1998. The overall budget deficit climbed to 4% of output, the highest level since Ms Rousseff’s predecessor and mentor, Luiz Inácio Lula da Silva, embarked on a huge stimulus package in 2009, as the global financial crisis took hold.

In turn,

On September 30th the ratings agency told an investors’ conference in São Paulo that it will refrain from re-appraising Brazil’s credit risk until 2016, once it becomes apparent what the next government is doing to tackle weak growth (which will average just 1.5-1.7% a year during Ms Rousseff’s four years in power), and a wonky budget.

On paper, Marina Silva, candidate of the centrist Brazilian Socialist party, promises a more responsible fiscal policy. So does Aécio Neves of the Party of Brazilian Social Democracy, the most market-friendly of the main contenders.

The odds odds Neves winning are slim-to-none. Silva is getting a lot of media attention, particularly in foreign media outlets, but Dilma will most likely win, as a commenter points out,

Perhaps you`re right, and that awful woman will be reelected. But not only because she has a “huge… and well funded political machine”. She also has absolutely no scruples whatsoever about lying, scheming and – most importantly – putting the gigantic State machine to work full-time for her campaign. Disgraceful. Worse times ahead for us Brazilians.

Brazil is holding a presidential election this Sunday.

The Miami Herald has this headline,
Brazil heads into white-knuckle presidential race — Bolivia, Uruguay follow
It’s an active political season in South America. As Brazil and Uruguay head into tight presidential races, Bolivian President Evo Morales is poised to clench a third term.

For the moment, all eyes are on Brazil, which is in a technical recession and expected to grow by less than 1 percent this year. That means the election will largely turn on voters’ perceptions of who can best lift the world’s eighth-largest economy out of the doldrums.

In 2010, the year Rousseff, a former leftist guerrilla and hand-picked choice of former President Luiz Inácio Lula da Silva, was elected, the economy grew 7.5 percent. It slowed to 2.7 percent the following year as the shocks of the global financial crisis took their toll.

But as other Latin American economies improved, Rousseff, stubbornly sticking to centralized economic policy, hasn’t been able to rekindle growth.

That’s true, but, perhaps more importantly, Dilma has a huge, well established and funded, political machine. Hence, I was not surprised by this other headline,
Brazil Leader Regains Edge in Election Polls
Two new electoral polls shows Brazilian President Dilma Rousseff widening her lead over her main challenger in a likely second-round runoff, surveys that disappointed many investors who hope for the incumbent’s ouster.

After a fast rise, Ms. Silva appears to be fading as she heads into this Sunday’s first round of voting. She surged in the polls after announcing that she would run for president in the place of running mate Eduardo Campos, who died in a plane crash Aug. 13. Voters fed up with politics as usual flocked to her in the early going. So did investors and businessmen who liked her market-friendly mix of ideas for getting tough on inflation and reducing state interference in the economy.

But a barrage of television attack ads by Ms. Rousseff has taken a toll on Ms. Silva, who so far has been unwilling and unable to respond in kind. Under Brazil’s unique election laws, Ms. Silva has only a fraction of the TV time allotted to Ms. Rousseff and third-place candidate Aécio Neves in the initial round of voting. Ms. Silva has also refused to go negative in her own campaign ads, despite encouragement from supporters to fight back.

Questions about her toughness persisted after she cried in front of a reporter following an interview. And her campaign has appeared disorganized and unprepared at times, lacking the depth and experience of Ms. Rousseff’s team.

I fully expect Dilma to win.

White knuckle? Not so much.

The former Lula cabinet member is now ahead in the polls:
Brazil’s Marina Silva Woos Farmers Ahead of Presidential Poll
Frontrunner Needs Powerful Agriculture Lobby She Alienated as Environment Minister

Ms. Silva doesn’t need the support of farmers like Mr. Ceolin to win the elections in October—an initial Oct. 5 vote and what polls indicate will be an inevitable runoff. All the polls taken since she officially became the Socialists’ candidate, replacing the late candidate Eduardo Campos, show her beating incumbent Dilma Rousseff in the Oct. 26 runoff.

But if she becomes president, strong opposition from Brazil’s wealthy and influential agricultural sector could make governing more difficult, said Paulo Calmon, a political-science professor at the University of Brasilia.

Additionally,

Ms. Silva promises to end Ms. Rousseff’s policy of forcing state-controlled oil company Petrobras to subsidize the price of gasoline to help control inflation, a policy that ethanol producers have strongly criticized because cheaper gasoline boosts competition for ethanol fuel. The Silva stance doesn’t just play to farmers: The prospect of less interference with Petrobras has boosted the company’s shares, and the benchmark Ibovespa stocks index, to the highest levels in more than a year.

Will see how it all develops; Guido Mantega, the finance minister for the last eight years, is on his way out.