Citigroup's CEO says she is certain that war in Ukraine and the energy crisis will plunge Europe into a recession

• Citigroup CEO Jane Fraser is convinced Europe is headed for a recession.
• She said that the energy crisis and war in Ukraine would drive economic downturn.

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.

The European Central Bank also indicated it will start hiking interest rates this week as it attempts to bring inflation under control. That will likely suppress economic growth and hit stock market indices like France's CAC 40 and Germany's DAX 40.

Fraser, who was promoted to become Citi's CEO in September 2020, was asked by CNBC's Geoff Cutmore whether Europe is headed for a recession.

"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."