Standard Chartered Plc on Wednesday said Russia's ongoing invasion of Ukraine can lead Europe into recession.

In an exclusive interview with CNBC-TV18, Jose Vinals, chairman of Standard Chartered, said Europe is in a difficult situation as a result of the Russia-Ukraine crisis and the implications that follow for gas prices due to the reduction in the supply of Russian gas to Europe and UK.

"This creates inflation as it increases energy prices and it leads to higher cost of living. It also reduces the purchasing power of households, reduces profitability for firms, and squeezes investment. So you have inflation, reduction in demand which is pushing Europe into recession in the later part of the year," Vinals said.

He believes that Asian countries are in a much better economic position than Western countries, "However, you should not underestimate the fact that the west is very much linked to Asia and the west is a significant source of demand for Asian exports."

"India as a case in point is an economy which is doing extremely well. The growth prospects for India both in this and next fiscal year are very good. So such a large emerging market with such high growth rates is something which is very hard to find in the world. So I think that Asia is in a much better place and there is some asymmetry between the fortunes of Europe, US and UK compared to Asian countries at least for 2022 and 2023," he added.

Watch the video for the entire conversation.

First Published:Sept 7, 2022 10:56 PM IST