A majority of Brazilians have backed four more years of Cardoso's inflation-busting Real Plan, which has put money in their pockets and enabled many to buy household goods like televisions and refrigerators for the first time.

"Everything is going well at the moment and it's going to improve," said lawyer Pedro Farias, 53, reflecting optimism that Brazil's four-year economic recovery would continue.

"The crisis hasn't affected Brazil. But even if the foreign markets have a problem, the government will take steps so that it doesn't come to this country," Farias said.

But analysts predicted ordinary citizens would have to swallow some bitter economic medicine to protect Brazil's stability in the face of a global crisis in emerging markets which is threatening the local currency, thereal.

"The beginning of the year is going to be extremely bad,"said Odair Abate, chief economist at Lloyds Bank. "A high proportion of people are not very aware of what lies ahead."

Cardoso appeared on course for a second term in office, having won enough votes to avoid a run-off election, early results from Sunday's voting show.

With elections out of the way, the government was expected soon to announce aggressive measures to tackle a fiscal deficit of almost eight per cent of gross domestic product (GDP).

The fiscal steps are needed to fend off contagion from a devaluation in Russia which has triggered massive dollar outflows from Brazil, forcing the Central Bank to hike interest rates to nearly 50 per cent to woo back investors.

Foreign cash reserves, considered Brazil's best defence against a speculative attack on the real, have plummeted to $48 billion at the beginning of October from around $67 billion at the end of August.

Analysts said the combination of high interest rates, new budgetcuts and a sharp drop in foreign cash flowing to Brazil spelled months of economic pain, with ordinary Brazilians taking the brunt of the pressure.

Consumers were likely to cancel or postpone purchases of durable goods such as cars, televisions and microwave ovens as the worsening outlook for the economy raised people's fears of losing their jobs and being unable to meet monthly payments.

Some retailers are already feeling the pinch.

"I think next year is going to be really hard," said Cassiade Janira, 29, a jewelry sales clerk in Rio de Janeiro. "What with unemployment going up, people are going to have a hard time eating. I don't think they'll be buying jewelry."

Unemployment in Sao Paulo, the industrial capital, was expected to rise across the board as the drop in demand hit nondurable goods like clothes and shoes.

Brazil's jobless rate stood at 8.48 per cent in August, according to the government's National Statistics Institute (IBGE), but unions said the rate was almost 19 per cent in SaoPaulo.

Foreign firms were also likely to postpone big decisions toinvest in Brazil until the outlook was clearer.

But many economists said it was too early confidently to predict the extent of a recession. A straw poll showed a wide range of forecasts, from an economic contraction of 3 percent to growth of 1.1 per cent in 1999.

Most analysts saw some recovery in the second half of the year, but said it would depend largely on global growth and the size of a package of financial aid Brazil is discussing with rich nations to restore confidence in its battered economy.

"Everything will depend on external financing conditions," said Antonio Klapka, analyst at ABN Amro in Sao Paulo.

Brazil needs a loan of at least $30 billion from the International Monetary Fund and other global lenders to soothe concerns about its ability to meet short-term debt repayments during the next few months, Klapka said.

Despite the gloom facing Brazilians, few were likely to regret voting for Cardoso, seen as a safe pair ofhands in times of crisis, Abate said. "It was a vote of confidence in Fernando Henrique Cardoso," he said.