Brazil on the eve of the elections: between industrial strength and political exhaustion

In early April, I was in São Paulo to attend the Bradesco BBI Investment Forum. This high-profile event provided numerous opportunities to speak with investors, analysts, and company representatives. It also offered valuable insights into macroeconomic developments, fiscal policy, and the impact of high interest rates on the corporate front.

Alongside numerous discussions, the main focus was on a company visit: the Klabin SA plant in Piracicaba. What I saw there impressively embodies Brazil’s outstanding operational quality and industrial capabilities.

Klabin in Piracicaba: a prime example of Brazilian industrial expertise

The new plant in Piracicaba, which opened at the end of 2024 on the site of a former sugar cane plantation, benefits from an ideal strategic location: it has excellent links to the motorway network and is situated in the immediate vicinity of the river (Rio) Piracicaba. With an annual capacity of 240,000 tonnes of corrugated board (abound 421 million square metres), it is the largest and most modern corrugated packaging plant.

The project, in which Klabin has invested BRL 1.56bn (N.B. Brazilian reais (singular: Brazilian real); approx. EUR 266mn), was officially inaugurated on 27 March 2025. It strengthens the company’s integrated business model and facilitates an even more efficient conversion of paper into finished packaging solutions. The plant’s high level of automation is particularly impressive: two modern corrugators with a working width of 2.8 metres achieve speeds of up to 450 metres per minute. These are complemented by nine state-of-the-art printing and die-cutting machines.

The political reality: a „Eleição de Cansaço“?

Whereas the factory tour conveyed a sense of sheer industrial might, the panel discussions and expert roundtables in São Paulo painted a far more sobering picture of the political mood. The focus was on the presidential election on 2 October 2026: will it be an “Eleição de Cansaço” – an election of weariness and exhaustion – or will one candidate achieve the long-awaited breakthrough?

Looking back, the 2022 presidential election is regarded as an “election of change”, characterised by deep polarisation, high emotional tension and a certain sense of relief when Luiz Inácio Lula da Silva narrowly won the run-off against Jair Bolsonaro (49.10%) with 50.90% of the vote. The situation for 2026 currently looks like a weary, almost resigned rehash of this duel. The voter base is clearly segmented: about 35% are firmly on the left (Lulistas and non-Lulista left-wingers), a further 35% firmly on the right (Bolsonaristas and non-Bolsonarista right-wingers).

The real deciding factor lies with the roughly 30% of independent and swing voters. Of these, about 20% do not intend to vote at all – they see no attractive alternative and view the election as a frustrating choice between “two evils”. The remaining 10% or so are undecided, ideologically flexible and have voted for both Lula and Bolsonaro in the past – and regretted it both times.

Lula und die Wahrnehmungslücke

Despite relatively solid macroeconomic data – real GDP growth of around 2.3% in 2025, inflation at 4.3% within the target range, and an average unemployment rate of 5.6% – many Brazilians do not feel that their personal circumstances have improved. Only 12% of those surveyed say their income has risen faster than the cost of living.

Three silent mechanisms are eroding disposable income: the creeping rise in household debt, persistently high prices for basic foodstuffs and energy, and the growing prevalence of online betting and gambling. Even the flagship “Bolsa Família” programme is no longer perceived as a generous gift from the state, but as a self-evident right to which one is entitled. Whereas Lula used to stand for social mobility and hope for a better future, his third term in office is primarily about redistribution and maintaining the status quo. For many, particularly in the lower middle class, this is no longer enough.

The right and the challenge of moderation

On the other side, Flávio Bolsonaro, son of former President Jair, faces a challenging three-pronged task: he must simultaneously project an image of moderation and respectability, develop his own clear political narrative, and defend his father’s government without remaining permanently in his father’s overwhelming shadow. The Bolsonaro family operates on social media as a highly professional “mega-cluster”, with Flávio, Jair, Eduardo, and Michelle specifically targeting different voter segments – from evangelical conservatives and libertarian economic liberals to hardline anti-establishment voices.

Since 2018, Brazil has shifted noticeably to the right in its social values: becoming more conservative, traditional, and family-oriented. The average voter no longer stands in the centre-left, as was the case a generation ago. Lula has already had to adopt more conservative positions in previous campaigns in order to reach broader sections of the electorate. His current strong left-wing stance now makes this strategic flexibility more difficult.

Both political camps currently lack a convincing, positive vision for the future. The election is appearing increasingly superficial and negative: many votes are based less on enthusiasm for one’s own candidate than on a rejection of the other side. Issues with the potential to break down this polarisation include concerns about raising children in an increasingly digital world, the reduction of bureaucracy, the high tax burden on businesses, the controversial role of the Supreme Court – the “Supremo Tribunal Federal” (STF) – and a growing anti-establishment sentiment across society. In particular, the Senate elections taking place in parallel could serve as an outlet for pent-up frustration with the STF.

Until October 2026, the political situation in Brazil remains highly tense – and, above all, wide open. The coming months will decide whether the “Eleição de Cansaço” actually materialises or whether a candidate will still find the strength to generate genuine enthusiasm.

 

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