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This photo shows ongoing construction at the Marina Bay Sands complex in Singapore. Asian governments need to roll out fresh stimulus measures to stop their economies from sinking further as the region reels from collapsing exports, regional analysts said (AFP)
It said Asia was hit especially hard as the global downturn led to an estimated $50 trillion in capital losses around the world.
"Asia was hit harder than other parts of the developing world because the region's markets have expanded much more rapidly," the Manila-based bank said in a new study.
It said losses in Asia, not counting Japan, amounted to more than a year's worth of gross domestic product.
"Losses on financial assets in developing Asia in 2008 totalled $9.6 trillion, or just over one year's worth of GDP."
ADB president Haruhiko Kuroda, speaking to delegates at a bank conference where the study was released, said he feared the region's economies would suffer further before they start to bounce back.
"This is by far the most serious crisis to hit the world economy since the Great Depression. While this crisis originated in the US and some European countries, by now no region or country is insulated," Kuroda said.
"I am afraid things may get worse before they get better."
The ADB, in a statement, said it estimated the losses in equity and bond markets, including those backed by mortgages and other assets. It also took into account the depreciation of many currencies against the US dollar.
Financial derivatives such as credit default swaps were not included in the study, it said.
The data, it said, "provides clear proof of the close connection between the markets and the economies around the world" which left "few, if any, countries immune to financial or economic fallouts elsewhere."
Economic recovery in the region may not begin until late 2009 or even early 2010, the study said.
Most emerging markets, including Asia and Latin America, are at a "crossroads," the study said, adding that the next 12 to 18 months "will be very difficult."
Kuroda said that while some countries in South Asia had less exposure to the crisis, they would still remain vulnerable since export earnings and dollar remittances were likely to soften. He did not name specific countries.
"The impact could manifest itself in the form of unemployment and a reduction in GDP," Kuroda said.
He also warned that the outflow of foreign direct investment could depress equity markets and contribute to "conservative" lending strategies.
The ensuing credit crunch would then seriously affect small businesses, he said.
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