SAO PAULO/BRASILIA, Sept 26 - From the butcher's shop where he works near Sao Paulo's historic center, Kleyton Zacarioto says customer traffic has been slowing for years thanks, he says, to a long period of rising food prices.

The prolonged squeeze on household budgets has turned the 39-year-old against leftist President Luiz Inacio Lula da Silva's bid for a fourth term in next month's election. Zacarioto says Lula is the only candidate he knows he will not vote for, though he recognized the president "did good things" when he was first in office in the 2000s. “Someone who earns a minimum wage has no way to get ahead,” he said.

The 80-year-old Lula is asking voters for patience, while touting record low unemployment, falling inequality, and recent months of easing inflation to argue the economy is better than it seems.

But Zacarioto's frustration reflects a challenge that has dogged incumbents around the world since the pandemic: persuading voters that improving economic indicators matter when many still feel squeezed by years of higher prices.

"I know it's still not great, but I guarantee inflation will stay under control," Lula promised in a recent campaign spot, saying he knew what it was like to not make end's meet.

For months, polls have shown a neck-and-neck race between Lula and Senator Flavio Bolsonaro, the son of former right-wing President Jair Bolsonaro, who was barred from the race after being convicted of an attempted coup. Polls suggest the economy is one of the main reasons Lula has struggled to fend off Senator Bolsonaro.

Nearly half of Brazilians say the economy has gotten worse in the past year, according to a Quaest poll published in September, compared to just 19% who say the economy improved.

Nearly half of Brazilians say the economy has gotten worse in the past year, according to a Quaest poll published in September, compared to just 19% who say the economy improved.

Senator Bolsonaro has made concerns that paychecks do not stretch as far as they once did a centerpiece of his campaign, frequently contrasting current supermarket prices with those during his father's presidency.

Lula's campaign has pushed back with a website dubbed "Market of Lies" to dispute the claims. It has also filed a complaint in the Superior Electoral Court, which oversees elections in Brazil, accusing the senator's campaign of lying about prices.

THE 'VIBECESSION' HITS BRAZIL Experts say the debate over the cost of living reflects a gap between improving labor and inflation measures and what many households experience day to day.

"All the big figures say that this has been a good government," said Thomas Traumann, a political analyst and author. "The fact is that everyday folks just don't agree with that."

Traumann drew comparisons to US President Joe Biden's struggles in 2024 to bridge a disconnect among voters between positive macroeconomic data and negative consumer sentiment, a moment economics commentator Kyla Scanlon dubbed the "vibecession."

"The government has achievements it can point to, but voters are asking how much of those gains have made it into their own households," said Felipe Nunes, founder and CEO of the pollster Quaest. "Voters judge the economy by their ability to pay bills, consume goods and services, and achieve their personal goals." Food prices and rising debt burdens help explain why many families have seen little improvement in their post-pandemic spending power.

"The government has achievements it can point to, but voters are asking how much of those gains have made it into their own households," said Felipe Nunes, founder and CEO of the pollster Quaest. "Voters judge the economy by their ability to pay bills, consume goods and services, and achieve their personal goals." Food prices and rising debt burdens help explain why many families have seen little improvement in their post-pandemic spending power.

While food inflation has slowed sharply — and prices even fell in June to August — years of steep price increases continue to strain household budgets, with prices remaining well above pre-pandemic levels.

At the same time, household debt service excluding mortgages reached a record 26.6% of income in June, according to central bank data, as fast-growing fintechs offered easy credit at steep interest rates and a boom in online betting absorbed billions of reais of household income, pushing many families into financial distress.

The burden has been exacerbated by Brazil's 13.75% benchmark interest rate, one of the highest real rates in the world, which the central bank has gradually started to lower while keeping a close eye on inflation.

"If you look at labor-market data, poverty indicators and the expansion of the middle class, you see a picture of significant progress in recent years," said Marcelo Neri, an economist at Fundacao Getulio Vargas. "But when you factor in cumulative food inflation, interest rates and online betting, the result is, let's say, a draw with a lot of goals scored on both sides." SKEPTICAL VOTERS Lula has tried to react.

With two weeks to go before the first round, Lula rolled out measures that seemed aimed at boosting disposable income, including a 15% increase in a landmark welfare program, which will take effect before the second round of the elections in late October. He also announced an executive order banning online betting from October 6. But polls suggest the measures have yet to make a meaningful impact on voter sentiment.

Back at the market, Carlos Alves da Silva has spent 15 years at the Barraca do Juca produce stand, its walls papered with posters showing the 1990s soap opera filmed there. He says it will not survive to 2028 if Lula wins.

"It's just a matter of taking on debt and scrambling to pay it off the following month," said Alves, who supports Senator Bolsonaro. Candidates have tried to show a path forward.

Senator Bolsonaro is campaigning on lower food costs through tax cuts, better transport links, expanded grain storage and higher domestic fertilizer production. Lula points to growing farm output, government food stocks, and expanded rural credit. But those proposals have yet to resonate with many Brazilians.

Conceicao Melquiades, visiting the market from Manaus, who is struggling to keep up with rising electricity and grocery prices, said she hasn’t seen any “real proposals” from the candidates. "In the end not much is going to change." REUTERS