Citigroup‘s chief executive Jane Fraser is now certain the war in Ukraine and the resulting energy crisis will lead to a European recession.
Fraser told the World Economic Forum in Davos that the Russian threat, surging energy prices, and supply chain disruptions make economic downturn all but inevitable.
“There are three ‘R’ words right now – Russia, recession, and rates,” she said. “Europe is right in the middle of storms from supply chains, the energy crisis, and its proximity to atrocities that are happening in Ukraine.”
Russia’s invasion of Ukraine led to a spike in energy prices, with crude oil surging past $110 a barrel. Central European countries such as Germany are seen as particularly vulnerable to price rises due to their reliance on Russian oil exports.
“Yes – and I hope I’m wrong,” she replied.
Fraser, who previously forecast the “brutal winter” that is currently hammering the stock market, said the US is likely to prove more resilient than Europe to the economic downturn.
“In the US, it’s much more about rates [than recessions] because there’s resiliency in the economy,” she said. “Consumers are sitting on $3.4 trillion of deposits so there’s some buffer there.”
Source: africa.businessinsider.com
