Brazil's Haddad Leaves Finance Ministry to Run for São Paulo Governor

Brazil's Finance Minister Fernando Haddad officially confirmed his departure from the federal government on Thursday to launch a gubernatorial campaign in São Paulo, the country's most populous and politically influential state. The announcement was made alongside President Luiz Inácio Lula da Silva at a Workers' Party rally held in São Bernardo do Campo, an industrial city where Lula built his legacy as a union leader and metalworker.

Haddad, 63, stepped down from his finance post earlier that day, with deputy minister Dario Durigan named as his replacement in a move widely anticipated by political observers. While the transition was expected, its timing carries significant weight ahead of October's presidential and state elections.

The Workers' Party views Haddad's São Paulo bid as a strategic move to strengthen Lula's reelection prospects in a state that historically shapes national outcomes. However, the race is far from favorable. Incumbent Governor Tarcisio de Freitas, a close ally of former President Jair Bolsonaro, holds a commanding lead in current polls. Nationally, Lula finds himself tied in hypothetical runoff scenarios against Senator Flávio Bolsonaro, signaling a tighter race than the 2022 contest.

Haddad brings a mixed electoral record to the campaign. After winning São Paulo's mayoral race in 2012, he lost his reelection bid in 2016, fell short in the 2018 presidential race, and was defeated in the 2022 São Paulo gubernatorial contest.

During his tenure as finance minister, Haddad championed a landmark overhaul of Brazil's consumption tax system, introduced a new fiscal framework, and reformed income tax policy to ease the burden on lower earners. Critics, however, pointed to growing public debt and an increased reliance on new revenue streams rather than spending discipline as key shortcomings of his economic stewardship.