UPDATE 2-Brazil's president loses support but on track to win re-election

jueves 27 de marzo de 2014 19:54 GYT

(Adds close of market, context on state companies rise)

By Paulo Prada

RIO DE JANEIRO, March 27 (Reuters) - Popular support for Brazilian President Dilma Rousseff has faltered ahead of the Oct. 5 presidential election, a poll showed Thursday, but the leftist leader remains favored to win a second term.

Hurt by a sluggish economy, high inflation and a scandal surrounding Brazil's state-run oil company, Rousseff's personal approval rating has dropped to 51 percent from 56 percent in November, the survey by the Ibope polling institute and Brazil's National Industry Confederation showed.

Support for her administration fell to 36 percent from 43 percent in the previous poll, while 27 percent of those polled disapproved of the government, compared with 20 percent in November. The latest poll was taken from March 14-17 and has a margin of error of 2 percentage points.

The drop in support, which led to a sharp rally in Brazilian stocks and boosted the country's currency on Thursday, reflects the challenges that Rousseff must overcome to win re-election.

"It shows that 2014 is going to be a hard year for the government," said Rafael Cortez, a political analyst with Tendencias, a consultancy in São Paulo. "All these negative issues are hurting her image as a candidate."

Although Rousseff and her ruling Workers' Party still enjoy widespread support because of economic gains made during the administration of former President Luiz Inácio Lula da Silva, her mentor and predecessor, Rousseff is currently presiding over the fourth year of lackluster growth in Latin America's largest economy.

Price increases and a lack of investment in the country's public services led to mass nationwide demonstrations last year that have caused many voters to question the Workers' Party's 12-year grip on the presidency.   Continuación...