Brazil votes in tight presidential runoff split along class lines

SAO PAULO (Reuters) - Brazilians voted on Sunday in a bitterly-contested election that pits a leftist president with strong support among the poor against a centrist senator who is promising pro-business policies to jumpstart a stagnant economy.

Final polls on the eve of the vote gave a slight edge to incumbent Dilma Rousseff, who is seeking a second four-year term. Her Workers' Party has held power for 12 years and leveraged an economic boom to expand social welfare programs and lift over 40 million people from poverty.

But many voters, especially upper-middle class and wealthy Brazilians, believe former state governor Aecio Neves offers a much-needed change of the guard for Latin America's biggest economy. A decade of strong economic growth peaked at 7.5 percent in 2010 and has flagged since Rousseff took office.

Brazil's most competitive presidential campaign in decades was also the most acrimonious in recent memory, dominated by negative advertising and a steady drum beat of corruption allegations.

The race looks like a choice between two camps - those who feel they are better off after more than a decade of Workers' Party rule or those who believe Brazil is stuck in a rut.

"People have had enough... so we are looking for other parties and other solutions for our country," said Marcelo Fernandes de Araujo, 45, a banker in Rio de Janeiro who voted for Neves.

Voting progressed smoothly at electronic polls across three time zones, from far-flung Amazon villages to Sao Paulo's business district.

Casting a ballot is mandatory for everyone between the ages of 18 and 70 and more than 140 million are registered to vote.

Rousseff, 66, voted early in the southern city of Porto Alegre, where she lived and rose in the state bureaucracy in the 1990s. She has promised to deepen flagship welfare programs and to seek to restore growth with a new economic team.

Neves, 54, says he will keep the popular social benefits while adopting more market-friendly fiscal measures to rein in public spending. He plans to take a tougher stance against inflation and give the central bank more autonomy to set monetary policy.

Accompanied by his wife, a former model, Neves cast his ballot in Belo Horizonte, the capital of Minas Gerais state. He governed there with high approval ratings despite implementing tough economic austerity measures to erase the state's deficit.

The choice takes Brazil back to a clash between classes in a country still riven by inequality. Rousseff's campaign sought to portray Neves, a third-generation politician, as a heartless playboy with little concern for the poor.

The final two opinion polls on Saturday showed Rousseff as a slight favorite, with a lead of 4-6 percentage points. But one of them also showed Neves pulling ahead in Minas Gerais, a bellwether every victorious presidential candidate has won since Brazil's full return to democracy in 1989.

Pollsters faced widespread criticism for failing to pinpoint Neves' strong showing in the first round of voting on Oct. 5, when he surged from a distant third place in polls to clinch second place and a spot in the runoff.

EXHAUSTED ECONOMY, FOCUS ON CORRUPTION

If the vote were about the economy alone, Rousseff would have a hard time winning.

As demand for Brazil's vast natural resources cooled in recent years, her administration has been unable to revive growth. That has strained a government model that relied on soaring tax revenues to fuel social programs and pump subsidized credit through state lenders, juicing a consumer boom.

The economy, which fell into recession in the first half of the year, has grown by less than 2 percent annually on Rousseff's watch. Investment has sagged and inflation, a chronic problem in Brazil's pre-boom past, is running just over the government's official tolerance limit of 6.5 percent.

Although unemployment remains at historic lows, economists see few bright spots on the horizon.

Meanwhile, a corruption scandal at the state-run oil giant Petrobras dominated the national media over the weekend and has hurt Rousseff's reputation as a competent manager because she once chaired the company's board and as president appoints senior executives.

Weekly news magazine Veja reported on Friday that a jailed black market money dealer, Alberto Youssef, told police and prosecutors that Rousseff and her predecessor, Luiz Inacio Lula da Silva, knew about an alleged bribery scheme at Petrobras thought to funnel cash to the Workers' Party and its allies.

Rousseff has vehemently denied the Veja report and says it is part of a smear campaign against her candidacy.

In a televised debate with Rousseff on Friday, Neves said Brazilians could end corruption with one measure: "Pull the Workers' Party from government."

Still, his plea is likely to fall on deaf ears among the roughly 40 percent of voters who believe the party helped them lead more prosperous lives and don't think Neves represents them.

Luis Resende de Assis, 33, said voting for Rousseff would ensure a bright future for his children.

"What's at stake is the possibility for them to study the way I did, doing a doctorate abroad and not coming from the upper class," he said in Brasilia, the capital.

(Additional reporting by Marta Nogueira in Rio de Janeiro and Leonardo Goy in Brasilia; Editing by Todd Benson and Kieran Murray)