Instant View: Rousseff wins Brazil presidential election

SAO PAULO (BestGrowthStock) – Ruling party candidate Dilma Rousseff won Brazil’s presidential election on Sunday in a runoff vote and will become the first woman to lead Latin America’s largest economy.

Rousseff had 55.8 percent of the valid votes against 44.2 percent for opposition candidate Jose Serra with more than 97 percent of the ballots tallied. She will be sworn in as the country’s president on January 1.

Following are analysts’ comments on the election:

LUIZ GUILHERME PIVA, DIRECTOR, LCA CONSULTORES

“This victory essentially represents an approval of the current government. This isn’t just any economic growth, it’s growth that has created jobs, raised salaries, helped people climb the economic and social ladder.”

“The challenges are much bigger. One of them is to show they can take advantage of the moment to keep the economy growing. That means carefully handling fiscal policy, exchange rates and interest rates.”

HUMBERTO BARBATO, PRESIDENT OF THE BRAZILIAN ELECTRICAL AND ELECTRONICS ASSOCIATION (ABINEE)

“We expect profound changes in industrial policy. We’ve been going through a process of deindustrialization and there is an urgent need for changes in exchange rate policy.”

“We need effective measures to compensate for the rise in the real, which has been taking place since the beginning of Lula’s government and which has been reflected in the performance of the sector.”

“I think the president (elect) will receive good advice to make these changes. I see Dilma (Rousseff’s) election as something positive, but would be worried if she allowed the radicals of the (Workers’ Party) to have an active voice in the government.”

MELVYN FOX, PRESIDENT OF BRAZIL’S CONSTRUCTION MATERIALS ASSOCIATION

“President Dilma (Rousseff) will have the tools to boost economic and social growth. Key government (housing) programs like ‘My Home’, ‘My Life’… and resources for financing should continue. We believe they could even grow further. However, it will not be easy because we still have the global crisis and Brazil still has to show it is ready to face that crisis, but the country is in the right path.”

TONY VOLPON, HEAD OF EMERGING MARKETS RESEARCH AMERICAS, NOMURA SECURITIES:

“The market would like to see change in fiscal policy, for sure. There were some signs in that direction this week… when there was talk of having a target for the debt-to-GDP ratio, which would be very positive because it would help bring interest rates lower.”

“The main challenge is keeping the growth rate high, but having an investment model more linked to the market and not so tied to (state development bank) BNDES. Clearly the BNDES is getting bloated and if it grows more it could even create a systemic risk for the economy.”

PAULO PETRASSI, MANAGING PARTNER, LEME INVESTIMENTO:

“I don’t think this will have an impact on markets… I don’t see added volatility in the exchange rate or the stock market.”

“The main challenge is on the fiscal side. Next year GDP will grow less, so I think she will have to cut spending significantly.”

CESARIO RAMALHO, PRESIDENT OF BRAZIL’S RURAL SOCIETY:

“The priority of the next president should be the exchange rate. The economy’s primary sector is suffering a lot due to the exchange rate problem.”

“The agriculture sector has been largely ignored during the campaign, there was no debate about it.”

ALBERTO BERNAL, HEAD OF RESEARCH AT BULLTICK CAPITAL MARKETS:

“We expect a continuation of the decent economic policies carried out by Lula, but unfortunately there seems to be no room for the structural reforms that Brazil needs to optimize public spending.”

“We will have zero reaction in the local market if Rousseff wins. The market has already priced in her victory.”

ROGER TISSOT, INDEPENDENT ENERGY CONSULTANT:

“A Rousseff victory means a stronger state-run oil company Petrobras and a bigger role of the state in the sector.”

“This is nothing compared to its Latin American neighbors like Venezuela and Bolivia, but the model could cost the sector competitiveness and efficiency.”

CRISTIANO OLIVEIRA, CHIEF ECONOMIST, BANCO SAFRA DE INVESTIMENTO:

“All eyes will be on the new ministers, Dilma’s cabinet and also on the makeup of the central bank.”

“A slowdown in the growth rate of central government spending is expected. In the last few years, spending growth has accelerated.”

ROBSON ANDRADE, PRESIDENT OF BRAZIL’S NATIONAL CONFEDERATION OF INDUSTRIES:

“Dilma has a good understanding of the ins and outs of government, having been President Lula’s principal adviser and coordinator of infrastructure investment programs.”

“She knows the needs of the country, she knows what needs to be done and has a vocation for management. The expectation is that she will build a great government.”

“There are big challenges ahead: the exchange rate, tax reform, reducing the impact of taxes on exports, infrastructure.”

“It’s difficult to choose just one priority, there are various issues and all of them need to be dealt with.”

(Reporting by Sao Paulo newsroom; Editing by Jerry Norton)

Instant View: Rousseff wins Brazil presidential election