Brazil election: Dilma Rousseff is narrowly re-elected president

Brazil's left-leaning PresidentDilmaRousseffwas re-elected Sunday in the tightest race the nation has seen since its return to democracy three decades ago, batting down a pro-business candidate's strong showing in a bitterly fought campaign.

The Workers' Party candidate had 51.6 per cent of the votes and challengerAecioNeves48.4 per cent, with 99.5 per cent of the ballots counted.

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Speaking in front of a banner that read "New Government, New Ideas" and had a giant photo of Rousseff from her days as a militant who fought against Brazil's long military regime, the leader thanked her supporters, starting with her No. 1 backer, her political mentor and predecessor Luiz Inacio Lula da Silva, who hand-picked her to take his place in 2010.

My dears, my friends, we have arrived at the end of a campaign that intensely mobilized all the forces of this country. I thank every Brazilian, without exception.- Brazilian PresidentDilmaRousseff

"My dears, my friends, we have arrived at the end of a campaign that intensely mobilized all the forces of this country," Rousseff said. "I thank every Brazilian, without exception."

She added that she "thanks from the bottom of my heart, our No. 1 militant, President Lula," as the former leader used a handkerchief to wipe tears from his eyes.

Rousseff's victory extends the rule of her party, which has held the presidency since 2003. During that time, they've enacted expansive social programs that have helped pull millions of Brazilians out of poverty and into the middle class, transforming the lives of the poor.

Rousseff faces tanking economy

But the leader now faces the daunting task of sparking a moribund economy that's underperformed since 2011, with some fearing it could put the social gains at risk.

"Dilma has social inclusion on her side, but the macroeconomic policies during her first four years in office have been very weak," said Carlos Pereira, a political analyst at the Gertulio Vargas Foundation, Brazil's leading think tank. "Inflation has returned, the country is in a technical recession and public spending is out of control. It is less likely she will be able to offer social inclusion and macroeconomic stability at the same time."

The choice between Rousseff and Neves split Brazilians into two camps those who thought only the president would continue to protect the poor and advance social inclusion versus those who were certain that only the contender's market-friendly economic policies could see Brazil return to solid growth.

Rousseff and Neves fought bitterly to convince voters that they can deliver on both growth and social advances. This year's campaign is widely considered the most acrimonious since Brazil's return to democracy in 1985, a battle between the only two parties to have held the presidency since 1995.

Neves had hammered at Rousseff over a widening kickback scandal Petrobras, with an informant telling investigators that the Workers' Party directly benefited from the scheme.

Rousseff rejected those allegations and told Brazilians that a vote for Neves would be support for returning Brazil to times of intense economic turbulence, hyperinflation and high unemployment, which the nation encountered when the Social Democrats last held power.

"We've worked so hard to better the lives of the people, and we won't let anything in this world, not even in this crisis or all the pessimism, take away what they've conquered," Rousseff said before voting in southern Brazil.

Worker's Party gathers in celebration

In Brazil's biggest city of Sao Paulo, hundreds of Workers' Party supporters gathered on a main avenue, waving banners as a truck with giant speakers blasted Rousseff's campaign jingles.

"I'm very happy because I think the construction of Brazil has barely begun and now we will have continuity," said Liliane Viana, a 56-year-old retired federal government worker. "I was afraid we were going to move backward. Now I am extremely excited."

Neves was a two-term governor in Minas Gerais state who left office in 2010 with a 92 percent approval rating. He surged at the end of the presidential race to score a surprise second-place position and force a runoff vote against Rousseff.

Speaking from his hometown of Belo Horizonte, he thanked the "more than 50 million Brazilians" who voted for him.

"I will be eternally grateful to each and every one of you who allowed me to dream again of the construction of a new project," he said. "I fought the good fight. I fulfilled my mission and I kept the faith."