Brazil’s worst water crisis in nearly a century is fueling inflation that’s reverberating through the economy, posing an additional challenge for the central bank and for President Jair Bolsonaro’s re-election bid. Electricity bills will increase as much as 15% next month as dangerously low water levels in hydroelectric reservoirs force the government to turn to more expensive power plants fueled by natural gas, diesel or coal, according to calculations from Fundacao Getulio Vargas, a Brazilian think tank. Food prices are also going up as farmers lose part of their crops to the drought. Combined, those issues would already spell trouble in a country where annual inflation is running at over 8%, the fastest in five years and more than double the target. XP Investimentos SA estimates they will account for 1 percentage point of this year’s price rises. But the situation in Brazil is more complicated because the government […]