By Marcela Ayres and Fernando Cardoso
Brazil’s Finance Minister Fernando Haddad speaks during a ceremony to launch a digital platform for tax reform in Brasilia, Brazil January 13, 2026. REUTERS/Adriano Machado/File Photo Purchase Licensing Rights , opens new tab
Sao Bernardo do Campo, Brazil, March 19 (Reuters) – Brazil’s Finance Minister Fernando Haddad confirmed on Thursday he is going to run for governor of Sao Paulo, giving President Luiz Inacio Lula da Silva a key ally on the campaign trail this year in the country’s most populous state.
Haddad announced the move alongside Lula during a Workers Party rally at a union headquarters in a working-class suburb where Lula once worked as a former metalworker and labor leader.
The Workers Party has long viewed a gubernatorial run by Haddad, even with long odds, as a way to bolster Lula’s chances in a key state for the presidential race.
“It’s a great privilege,” Haddad said when announcing his bid, rejecting the idea that his candidacy would be a sacrifice for Lula’s political plans.
Earlier in the day, the minister announced at an event in Sao Paulo he was stepping down from the finance minister position. Lula said deputy finance minister Dario Durigan would replace him, in a widely expected move.
Haddad, 63, signaled in late 2025 he would leave the ministry early this year, initially saying he wanted to advise Lula on his October reelection bid.
Since then, the outlook has dimmed for the leftist president ahead of October’s election, with polls showing him tied in a potential run-off against Senator Flavio Bolsonaro, son of former right-wing President Jair Bolsonaro, whom Lula narrowly defeated in 2022.
“To my delight, Haddad has once again decided to make himself available to be a candidate,” Lula said at the rally in Sao Bernardo do Campo, an industrial hub within the Sao Paulo metropolitan area. The president added that the current Brazilian political situation requires the “best people” leading states and cities.
In an interview with leftist news website Opera Mundi last week, Haddad acknowledged “the scenario has become more complicated,” saying he would be a candidate without confirming he would seek to run for Sao Paulo governor.
UPHILL BATTLE
Lula faces a more uncertain political climate, exacerbated by an oil-price shock from the widening conflict in the Middle East that threatens to stoke inflation, and Haddad’s race in Sao Paulo is expected to be even tougher.
Surveys show incumbent Governor Tarcisio de Freitas, a popular Bolsonaro ally, with a clear polling lead.
Another electoral defeat would add to a string of ill-fated campaigns for Haddad, a lawyer with a master’s degree in economics and a doctorate in philosophy.
After winning the Sao Paulo mayoral election in 2012, he lost his 2016 reelection bid in the first round. He was defeated in the 2018 presidential contest after replacing Lula, who was barred from running while jailed in a corruption case later annulled on procedural grounds.
Haddad also lost his 2022 bid for Sao Paulo governor, though many in his party saw his candidacy as key to helping Lula secure a majority of the state capital’s votes in that year’s presidential election.
POLICY MILESTONES
As finance minister, Haddad led an overhaul of Brazil’s consumption taxes, whose complexity was long viewed as a drag on the economy.
He also passed a new fiscal framework to rebalance public accounts, with budget targets the government later softened. Haddad faced criticism over Brazil’s rapidly rising public debt, driven mainly by hefty interest payments and mounting concern that government spending is rising too fast.
Haddad also oversaw changes to Brazil’s income tax that raised the burden on the wealthiest while exempting lower-income earners, cut regressive tax breaks and advanced several climate‑related financing measures.
He also hiked taxes on corporate credit, foreign‑exchange transactions and imports, reinforcing critics’ claims the leftist government has relied on new revenue rather than tightening public spending.