(Adds market reaction, paragraph 13)
By Anthony Boadle
BRASILIA, Sept 9 (Reuters) - Brazilian President Dilma Rousseff has recovered ground and would be tied in popular support with opposition politician Marina Silva in a runoff vote in October, a new poll showed on Tuesday, though a festering corruption scandal threatens to complicate Rousseff’s re-election bid.
The poll showed that Silva, an environmentalist, would win a likely runoff election against Rousseff with 45.5 percent of the vote against 42.7 percent for the incumbent, a statistical tie within the poll’s margin of error. The previous survey by polling firm MDA had shown Silva with a six percentage point lead.
The survey was begun before a scandal involving alleged bribery at state-run oil company Petroleo Brasileiro SA was reported over the weekend. The allegations by a jailed former Petrobras executive that dozens of politicians from the governing coalition received kickbacks are expected to complicate Rousseff’s bid for re-election.
The Rousseff administration’s approval rating, however, has risen to 37.5 percent in the poll from 33.1 percent two weeks ago.
The MDA poll showed Rousseff winning the first round of voting on Oct. 5 with 38.1 percent, up from 34.2 percent in the previous poll. Silva remains in second place with 33.5 percent, up from 28.2 percent in the earlier poll.
Support for market favorite Aecio Neves in the first round fell to 14.7 percent from 16 percent two weeks ago.
Silva, a popular anti-establishment figure, surged in the polls after she was thrust into the race last month by the death in a plane crash of her party’s original candidate. She is still well-positioned to win the election if it goes as expected to a second-round runoff on Oct. 26 between the top two vote-getters.
Support for Silva appears to have leveled off, however, and she is facing criticism for flip-flopping on issues such as gay marriage and nuclear energy, for which she withdrew her backing.
“Marina has hit her ceiling and she is now a target, while the ruling Workers’ Party has plenty of resources to apply to the campaign,” said André Cesar, an independent analyst in Brasilia. “Rousseff is showing that she is still competitive and can win this election,” he said.
Analysts are divided over the impact of the Petrobras scandal. Some say it will worsen public anger over corruption in Rousseff’s Workers’ Party, while others expect the allegations will lose steam.
On the economic front, Brazil has tipped into recession this year, but the government has managed to keep unemployment low and layoffs have not affected its voter base.
But in more bad news for Rousseff, Moody’s Investors Service raised a red flag on Tuesday saying that it may cut Brazil’s credit rating in the next couple of years if the government does not tighten fiscal discipline as the economy slows down.
Rousseff’s recovery in the MDA poll disappointed investors hoping for an end to her interventionist economic policies and, coupled with the warning from Moody‘s, contributed to weakening the Brazilian currency by almost 1 percent to 2.28 reais to the dollar and to a drop in the Bovespa stock index.
The MDA poll commissioned by the transport industry lobby CNT surveyed 2,002 people between Sept. 5-7 and has a margin of error of plus or minus 2.2 percentage points. (Editing by W Simon; and Peter Galloway)