By Brendan O'Boyle, Luciana Magalhaes and Rodrigo Viga Gaier
BRASILIA/SAO PAULO/RIO DE JANEIRO, Oct 4 (Reuters) - Senator Flavio Bolsonaro held a narrowing lead in the first round of Brazil's presidential election on Sunday, after more than half the votes were counted, with pollster Datafolha projecting that the election would proceed to a second vote.
Flavio, the 45-year-old son of former President Jair Bolsonaro who hopes to return his father's right-wing movement to power, was leading leftist President Luiz
Inacio Lula da Silva, 80, who is seeking a fourth term, following a campaign dominated by corruption scandals, economic anxiety and accusations of US meddling.
With about 65% of votes reported, Flavio led Lula with 49.58% of the votes to the president's 42.25%. A candidate must pass 50% in order to win outright in the first round.
The two leading candidates were expected to head into a second round vote, Brazilian pollster Datafolha said. Surveys have shown Lula and Flavio polling roughly even in an October 25 runoff.
Early results showed southern states that lean to Bolsonaro reporting faster, while votes from Lula's northeast stronghold are tallied more slowly.
Analysts told Reuters they believed Flavio was receiving "protest votes" of people voting against Lula rather than for the right-wing senator - votes they had been expected to save until a second round.
A victory for the senator would extend a wave of wins across Latin America by right-wing candidates aligned with US President Donald Trump, while Lula's reelection could create a headache for Washington, which has clashed with his government over trade and security.
Despite growing worries over Brazil's public finances and sluggish economic growth, the campaign offered meager policy debate, as both leading candidates skipped the major TV debates.
UNDECIDED VOTERS
While polls right up until Saturday showed Lula would likely lead the first round but not avoid a runoff, Flavio told journalists in Rio de Janeiro he was confident he could win the presidency in the first round, citing voters' frustration with his chief opponent.
Flavio was counting on "a protest vote from people who would otherwise vote for another candidate but are opposed to Lula," he said. "I hope it’s enough to secure a victory in the first round."
Thaise Lima, a 41-year-old lawyer on her way to vote in Sao Paulo, said her main goal was to get Lula's Workers' Party out of office.
"I don't think Flavio is the best candidate, but I might decide to vote for him in the next few minutes," she said, adding that she wished psychiatrist and author Augusto Cury were a more viable candidate.
Fernando Tempel, 49, a management consultant, told Reuters he was voting for Flavio despite initially planning to vote for Romeu Zema, the former governor of Minas Gerais state.
OUTSIDE INTERFERENCE
On the other hand, Lula's allies have warned that the Trump administration might refuse to recognize election results if he wins, pointing to an aborted effort to send US officials to Brazil.
"What is at stake is the future of Brazil," Lula said after voting in Sao Bernardo do Campo, in Sao Paulo state.
Trump has not formally endorsed a candidate, though he hosted Senator Flavio Bolsonaro at the White House and praised him publicly.
"I'm a little worried about everything that's been happening recently, including internationally. I feel this election has had a lot of outside influence, more than in previous elections," said Cristiano, 34, a doctor in Brasilia who voted for Lula and preferred to withhold his surname.
"We are confident in our President Lula, who will fight for national sovereignty," said Pedro Palacio, 45, who was voting in Brasilia alongside his wife, Andreia, and their two sons and two dogs, all of whom wore outfits supporting the president.
As of Sunday afternoon, the election was proceeding normally, Brazil's electoral court chief Kassio Nunes Marques said in a press conference.
“Teams monitoring international risks have not identified any risks whatsoever," he said.
Reuters reported on Wednesday that Brazilian intelligence officials briefed a French and German delegation on alleged US and Russian interference before the election. The US has rejected claims of interference in Brazil's affairs.
ECONOMIC HEADWINDS
Despite falling inequality and unemployment, Lula has struggled to win over voters grappling with high living costs, heavy household debt and the threat of street crime and more pervasive gang activity.
Flavio Bolsonaro has sought to capitalize on cost-of-living concerns, while Lula has moved to ban online gambling and, as the race tightened, expanded welfare and proposed fresh debt relief for families.
Rising spending and public debt above 82% of GDP have stoked fiscal concerns that Brazil's next president will need to address. The government lowered its economic growth forecasts for this year and next to 2.0% and 2.3% respectively.
"I voted for Brazil to start growing again," said Marciano de Souza e Silva, a 52-year-old public servant in Brasilia and former Lula voter who moved right, voting for Jair Bolsonaro in 2018 and 2022 and Flavio on Sunday.
"The best social program is one that encourages people to start businesses, to actually produce real wealth," he said.
SCANDAL-PLAGUED CAMPAIGNS
Overshadowing the policy debate, a scandal surrounding the now-defunct Banco Master has engulfed much of Brazil's political class and renewed public anger over corruption.
Daniel Vorcaro, who ran the bank, was arrested earlier this year and accused of a multibillion-dollar fraud scheme. The investigation has probed the banker's ties to figures from Supreme Court Justice Alexandre de Moraes to Flavio Bolsonaro, who is being investigated for money laundering tied to the case by the federal police.
The candidate has denied any wrongdoing, although he confirmed raising millions of dollars from Vorcaro to make a movie about his father.
The banker's connections to Moraes, widely perceived as a Lula ally, plunged the court into crisis a month before the vote, creating fresh problems for the president. Moraes has said the case against him is politically motivated for his role in the conviction of the elder Bolsonaro.
On Sunday, voters will also elect all 513 lower house members and two-thirds of the Senate, where some lawmakers have pushed to impeach Moraes.
Congress has gained greater influence in Brazilian politics since the impeachment of former President Dilma Rousseff, a Lula ally, in 2016, raising the stakes of those legislative races.
(Reporting by Lisandra Paraguassu, Brendan O'Boyle, Ricardo Brito and Marcela Ayres in Brasilia, Luciana Magalhaes, Oliver Griffin and Fernando Cardoso in Sao Paulo, Rodrigo Viga Gaier, in Rio de Janeiro; Writing by Brendan O'Boyle and Oliver Griffin; Editing by Brad Haynes, Aurora Ellis and Alison Williams)
