Brazil's ruling Workers' Party has formally nominated President Dilma Rousseff to run for re-election in October in what is shaping up to be its toughest race since winning power in 2002.

Rousseff's popularity is falling because of Brazil's high cost of living and slowing economy, and she was jeered at the opening game of the World Cup last week.

She survived massive protests last year by Brazilians demanding better health, education and public transport services instead of the costly stadiums built for the World Cup.

She is still favoured to win re-election in a second-round runoff, though her lead has narrowed in recent months, according to opinion polls.

"We face a challenge because the quality of life has improved in Brazil and when that happens in a country, its people demand more and improved quality," Rousseff said in a speech to a cheering party convention.

Rousseff's main challenger, Aecio Neves of the centrist Brazilian Social Democracy (PSDB) party, is running on a more business-friendly platform aimed at restoring investment and growth to Brazil's economy

"It will be a very difficult election, but, wait, the game has not even kicked off yet," said party founder and former president Luiz Inacio Lula da Silva.

Source: Reuters