Rousseff promises reform after winning re-election

SAO PAULO, Oct 27 (agencies): Despite opposition from nearly half of Brazil's voters, leftist President Dilma Rousseff won re-election on Sunday and will have another four years to try to revive growth in a once-booming economy gone stagnant.

The 66-year-old Rousseff, who was a Marxist guerrilla in her youth, overcame growing dissatisfaction with the economy, poor public services and corruption to narrowly clinch a second term for herself and the fourth in a row for her Workers' Party.

After a bitter, unpredictable campaign that pitted poorer Brazilians grateful for government anti-poverty programs against those exasperated with a stalled economy, Rousseff must now seek to continue flagship social services even as she tweaks economic policies to restore growth.

President Dilma Rousseff has promised to re-unite Brazil after narrowly winning re-election to a second term in office with 51.6% of the vote.

She said "dialogue" would be her top priority after a bitterly fought campaign against centre-right candidate Aecio Neves, who got 48.4% of the vote.

The left-wing leader said she wanted to be "a much better president than I have been until now".She faced mass protests last year against corruption and poor services.

But Ms Rousseff, who has been in power since 2010, remains popular with poor Brazilians thanks to her government's welfare programmes.

The vote split Latin America's biggest country almost evenly in two, along lines of social class and geography.

Whereas Dilma Rousseff did well in the poorer northern states, her opponent from the Brazilian Social Democracy Party (PSDB) took many of the wealthier and more developed southern parts of Brazil.

Most investors are skeptical that Rousseff can turn around the slumping economy after four years of ineffective industrial policies. Futures contracts for Brazil's Bovespa stock index expiring in December fell more than 6 percent on Monday before the Sao Paulo stock exchange opened, while Brazil's currency slipped 3 percent to a nearly six-year low.

Still, Rousseff and aides consistently shrug off market pessimism as little more than tantrums by speculators. As her camp celebrated victory late on Sunday, longtime foreign policy advisor Marco Aurelio Garcia told reporters that investors should relax and "take tranquilizers."

Speaking to a relieved crowd of supporters in Brasilia, the capital, Rousseff acknowledged the close race and the call for change expressed by many voters.

Her slim, three-point margin over centrist candidate Aecio Neves came largely thanks to gains against inequality and poverty since the Workers' Party first came to power in 2003.

Using the fruits of a commodity-fueled economic boom in the last decade, Brazil's government expanded welfare programs that helped lift more than 40 million people from poverty despite the current economic woes.

The "Brazilian model" has been adopted by center-left parties across Latin America and Rousseff's victory, however narrow, is a blow for conservatives in the region.

It also means there will be no dramatic improvement in ties with the United States, hit in recent years by trade disputes and U.S. government spying programs that infuriated Rousseff.

About 40 percent of Brazil's 200 million people live in households earning less than $700 a month, and it was their overwhelming support that gave Rousseff victory on Sunday.

Now, she pledges to deepen social benefits while working to revive an economy that fell into recession in the first half of this year.