For Kleyton Zacarioto, a 39-year-old butcher near São Paulo’s historic centre, Brazil’s economic recovery has yet to translate into easier household finances. Customers have been buying less meat for years as food prices have risen, he said, and he has decided not to vote for President Luiz Inácio Lula da Silva in the October election.
“Someone who earns a minimum wage has no way to get ahead,” Zacarioto said.
Lula, 80, is seeking a fourth presidential term and has pointed to record-low unemployment, falling inequality and easing inflation as evidence of economic progress. But his campaign faces a more immediate problem: many voters are judging the economy through the cost of groceries, household debt and the ability to pay monthly bills rather than through broader economic indicators.
“I know it’s still not great, but I guarantee inflation will stay under control,” Lula said.
The election is shaping up as a contest between Lula and Senator Flavio Bolsonaro, the son of former President Jair Bolsonaro. Recent polling has shown the two statistically tied in a potential runoff, leaving the economy as a central issue in the campaign.
A Quaest poll found that almost half of Brazilians believed the economy had worsened over the previous year, while only 19% said it had improved. The figures illustrate the gap between national economic statistics and how households perceive their own financial situation.
Bolsonaro’s campaign has sought to reinforce that perception by comparing supermarket prices, while Lula’s campaign has responded with a “Market of Lies” initiative and a complaint to Brazil’s Superior Electoral Court alleging that the opposition has made false claims about prices.
Economists and political analysts quoted by Reuters said voters often assess economic conditions according to whether they can meet everyday expenses and maintain their standard of living. Thomas Traumann said strong macroeconomic figures can coexist with dissatisfaction among ordinary households, while Felipe Nunes said voters are more concerned with their capacity to pay bills and purchase goods and services.
Food inflation has slowed, with prices declining between June and August, but the cumulative increase since before the pandemic means many products remain considerably more expensive than they were several years ago. At the same time, household debt servicing excluding mortgages reached 26.6% of disposable income in June.
High interest rates have compounded the pressure. Brazil’s benchmark interest rate, which stood at 13.75%, has begun to decline gradually, but expensive credit, the rapid expansion of fintech lending and online betting have contributed to financial strain for some households.
Marcelo Neri, an economist, described Brazil’s recent progress in employment, poverty reduction and the middle class as significant, while noting that cumulative food inflation, high interest costs and betting debts have produced a more complicated picture for consumers.
Lula’s government has introduced measures including a 15% increase in welfare payments and a ban on online betting scheduled for October 6. Polling, however, suggests that these measures have so far made little difference to perceptions of the economy.
Flavio Bolsonaro has proposed tax reductions and measures involving transport, grain storage and fertiliser, while Lula has focused on agricultural production, food stocks and rural credit.
For Conceição Melquiades, who sells produce, neither side has offered a convincing answer to the financial pressures facing small businesses and consumers.
“In the end not much is going to change,” she said.
Another shopkeeper, Carlos Alves da Silva, said his business would not survive until 2028 if Lula won another term. “It’s just a matter of taking on debt and scrambling to pay it off the following month,” he said.
