Brazilian President Luiz Inácio Lula da Silva's lead over rival Flávio Bolsonaro narrowed in a potential runoff, according to an AtlasIntel/Bloomberg poll released this week.

Weak economic data, a contentious electoral court ruling, and mounting campaign attacks have combined to sharpen one of Brazil's tightest presidential races ahead of the October 4 first-round vote.

The poll showed Lula would win a second-round runoff with 47.1% of votes against 42.6% for Bolsonaro, the Liberal Party senator and son of former President Jair Bolsonaro, down from a 49.2%-to-42.9% lead in July.

In a first-round scenario, Lula led with 43.4%, followed by Bolsonaro with 33.7%, Augusto Cury with 7.8% and Ronaldo Caiado with 3.3%. AtlasIntel surveyed 5,014 people between August 25 and 30, with a one-percentage-point margin of error.

The tightening race came as Brazil's top electoral court, the TSE, ruled on September 1, by four votes to three, against punishing Bolsonaro's campaign for using an AI-generated video of his father, former President Jair Bolsonaro, during the Liberal Party's convention, financial newspaper Valor reported.

The majority found the video did not breach election law on deepfakes because it was shown at an internal party event rather than distributed to voters as campaign propaganda.

Justice Kassio Nunes Marques, who wrote the winning opinion, distinguished between political messaging aimed at party members and propaganda directed at the electorate, even though the content was later widely shared on social media, according to Valor.

He was joined by justices André Mendonça, Dias Toffoli and Antonio Carlos Ferreira. Dissenting justice Ricardo Villas Boas Cueva argued that requiring a "degree of realism" to classify content as a deepfake created a threshold not found in the law and said the AI-manipulated content had favoured the candidacy regardless of realism.

The ruling also set a broader legal test for deepfakes this election cycle, with Nunes Marques stating that the classification must rest on three factors: the synthetic nature of the content, its degree of realism, and whether it reproduces or alters the image or voice of a real, deceased or fictitious person.

Away from the courtroom, the campaign turned combative on television. During the first night's free electoral broadcast, on September 1, Lula labelled Bolsonaro "the worst of the Bolsonaros," while his campaign aired reports concerning messages in which Bolsonaro allegedly sought money from Daniel Vorcaro, a disgraced banker linked to organised crime networks, according to a separate Valor report.

Lula's broadcast also focused on sovereignty and rare earth elements, declaring that "there are people out there watching, and there are people here ready to hand everything over on a silver platter. They are the true traitors of the nation," and juxtaposed images of Bolsonaro with US President Donald Trump.

Bolsonaro's campaign, in turn, emphasised public safety, airing testimony from crime victims and pledging measures including new prisons, tougher penalties for phone theft and chemical castration for rapists.

Separately, Lula used social media to criticise Bolsonaro's stance on climate change. Responding to comments Bolsonaro made in a television interview, Lula wrote that reducing the climate crisis to sanitation policy reflected "the irresponsible amateurism of someone who proposes to govern a country."

Bolsonaro, a self-described climate sceptic, had said extreme weather reflected natural cyclical patterns and that expanding basic sanitation was the best protection against climate impacts.

Lula countered by listing his government's environmental spending, including more than BRL23bn ($4.46bn) allocated to water and sanitation works since 2023 and a newly created inter-ministerial situation room to monitor El Niño risks.

The political battle unfolded against a weakening economic backdrop. Brazil's second-quarter gross domestic product grew 0.5% quarter on quarter, slightly above the 0.4% forecast by analysts, but household consumption fell 0.4% over the same period, according to an analysis published by Estadão.

The newspaper said prolonged high interest rates had eroded the effect of government stimulus measures designed to boost the economy ahead of the election, leaving many Brazilian families with little spare income.

Brazil's central bank has only cut its benchmark Selic rate modestly since March, with analysts expecting a further quarter-point reduction this month while rates remain elevated near 14% through year-end.