European Central Bank head says supply bottlenecks to persist for some time

By Ovunc Kutlu

ANKARA (AA) - European Central Bank (ECB) President Christine Lagarde said on Monday that supply bottlenecks are expected to persist for some time.

"But, there are signs that they may be starting to ease. This will allow the economy to pick up strongly again later this year," Lagarde told the European Parliament.

She said supply bottlenecks and high energy costs are expected to dampen economic activity in the near term.

Lagarde said energy prices continue to be the main reason for the high rate of inflation, adding: "Their direct impact accounted for over half of headline inflation in January and energy costs are also pushing up prices across many sectors."

"Food prices have also increased, owing to seasonal factors, elevated transportation costs and the higher price of fertilizers. In addition, price rises have become more widespread, with the prices of a large number of goods and services having increased markedly," she explained.

Lagarde noted that rising geopolitical tensions and persistently high costs of energy could exert a stronger than expected drag on consumption and investment.