Lula’s Inner Circle Turns on Communications Chief as Approval Slides to 44%

When a government begins blaming its own communications team for falling poll numbers, the problem is rarely communications.

A Lula government crisis that has been building behind closed doors broke into public view this week when Casa Civil Minister Rui Costa — widely considered President Lula’s most powerful cabinet enforcer — openly criticized Sidônio Palmeira, the head of Brazil’s Secretaria de Comunicação Social (Secom). Costa argued that Secom should be drawing direct comparisons between the Lula and Bolsonaro administrations to highlight the government’s achievements.

The suggestion immediately drew scrutiny. Brazilian law explicitly prohibits the use of government communications for electoral purposes — a restriction designed to prevent incumbents from converting state resources into campaign tools. That the country’s chief of staff either ignored or was unaware of this legal barrier raised questions about whether the Planalto is prioritizing Lula’s re-election over constitutional governance.

The Numbers Driving the Panic

The timing of Costa’s outburst is no coincidence. Lula’s approval rating has dropped to 44% against 51% disapproval in the latest Genial/Quaest survey, the worst gap since July 2025. For the first time, women — a demographic Lula has historically dominated — disapprove of the government more than they approve (48% vs 46%). Among self-described independents, disapproval stands at 57%.

More alarming for the PT is the trajectory in head-to-head matchups. An AtlasIntel/Bloomberg poll showed Flávio Bolsonaro numerically leading Lula for the first time in a second-round simulation — 47.6% to 46.6%, within the margin of error. In December, Lula led by 12 points. That gap evaporated in four months.

The Messenger vs. the Message

Palmeira, an experienced advertising executive, replaced Paulo Pimenta at Secom and is widely credited with professionalizing the office. Under his watch, the operation has become less ideologically driven and more disciplined — he reportedly intervened to prevent first lady Janja da Silva from participating in a Carnival parade themed around a cult of personality for Lula, avoiding what would have been a significant PR embarrassment.

But the editorial board of O Estado de S. Paulo, one of Brazil’s most influential newspapers, argued this week that no amount of messaging skill can compensate for the government’s core problem: the absence of a clear agenda. Lula arrives at the final stretch of his third mandate without articulating what a fourth term would accomplish beyond personal continuity. Decisions, the newspaper argued, are reactive — driven by social media sentiment, short-term political calculations, and what it called the PT’s habitual populist toolkit.

A Pattern of Blame

The Secom scapegoating fits a broader pattern that analysts have identified across Lula’s third term. When household debt rises, the government has attributed the problem to consumer behavior. When fiscal targets slip, officials invoke inherited obligations. When poll numbers fall, the press and now the communications team take the blame.

The question facing the PT six months before the October 4 first round is whether a strategy built on external blame can sustain a viable re-election campaign — or whether the Lula-Alckmin ticket needs to offer voters something more substantive than the argument that the alternative is worse.

What It Means for Markets

Internal government fractures are not just political theater — they directly affect policy execution and market confidence. A Casa Civil at war with Secom signals dysfunction at the top of the executive branch at a moment when Brazil faces a difficult fiscal calendar, Selic rate decisions tied to the inflation outlook, and an economy where the primary fiscal deficit remains a concern.

As the election approaches, political risk will increasingly drive asset pricing. The narrowing polls have already contributed to real weakness and spread volatility in Brazilian sovereign debt. Whether Lula’s team can pivot from blame to a credible governing narrative — or whether the internal finger-pointing accelerates — will shape the trajectory of Brazilian markets through the second half of 2026.