Brazil’s Finance Minister Fernando Haddad is expected to confirm on Thursday he will 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, 63, signaled in late 2025 that he would leave the Finance 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 leader, 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.

In an interview with leftist news website Opera Mundi last week, Haddad acknowledged that “the scenario has become more complicated,” saying he would be a candidate without confirming he would seek to run for Sao Paulo governor.

Haddad and Lula are set to address a Workers Party rally at a Sao Paulo union headquarters, a symbolic home for the president, a former metalworker, at 7 p.m. local time (2100 GMT).

Lula faces a more uncertain political climate, exacerbated by an oil-price shock from 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.

As finance minister, Haddad led an overhaul of Brazil’s consumption taxes, passed a new fiscal framework, and implemented changes to income tax, advancing several climate-related financing measures.

Another electoral defeat would add to a string of ill-fated campaigns for Haddad, but the Workers Party views his gubernatorial run as a way to boost Lula’s chances in a key state for the presidential race.