Brazil heads to the polls in high-stakes election

Brazilian President Lula da Silva will face up to 12 candidates in Sunday's first round of voting with polls showing no candidate is expected to reach the 50% of votes required to claim victory. That means the top two candidates will likely head to a runoff vote on October 25th with Lula expected to face Flavio Bolsonaro, son of former President Jair, who is currently under house arrest for plotting a coup after losing the 2022 election. A win for left-leaning Lula would mark his fourth presidential term. While victory for Bolsonaro is expected to mark a shift back to his father's right-wing movement. >> If a victory by Flavio Bolsonaro happens, that would deepen the the strategic alignment of the region with Mr. President uh Donald Trump's plan for America, of course. Uh by contrast if Lula obtains a fourth term that will let's say restrict Washington's bid to dominate the neighborhood. >> One area of concern is the country's mounting debt pile. Brazil's debt has steadily risen over recent years while its budget deficit stands at more than 9% of GDP. It comes as the country's wider economy comes under pressure with inflation hovering around 4% and a reduction in growth forecasts while yields on government debt continue to climb alongside global peers. The US also hit Brazilian exports with a 25% tariff in July. >> At the moment you have two instruments or institutional frameworks to rein in indiscipline. You have inflation targeting which has been in place for a number of years and also a fiscal framework that constrains the the fiscal primary results. These these two things together sort of tie up in a sense the fiscal and monetary policies of the government >> With the election being seen as a coin flip between the two candidates, the result could fundamentally change Brazil's economic fortunes. Chloe Taylor, CNBC Business News.