MANILA (March 13) — As a result of a worldwide economic meltdown, it erased an astounding US$50 trillion off the value of financial assets in 2008. This includes $9.6 trillion of losses in developing Asia alone, the Asian Development Bank said.
In a study commissioned by the Manila-based lender on the impact of the financial crisis on emerging economies, it estimated the value of financial assets worldwide — currency, equity and bond markeets — to have dropped by $50 trillion in 2008.
According to the study, Asia was affected more — losing the equivalent of just over one year’s worth of gross domestic product — than other emerging economies. This was due to the rapid expansion of the region.
It said the figures provide clear proof the close connections between markets and economies around the world, leaving few, if any, countries immune to financial or economic fallout. But the study says a recovery can only now be envisaged for late 2009 or early 2010.
“This is by far the mot serious crisis to hit the world economy since the Great Depressiion,”said ADB President Haruhiko Kuroda. But he added an optimistic forecast saying Asia would be “one of the first regions to emerge from it.”
Developing Asia includes 44 economies from the central Asian republics to China to the Pacific islands. ADB has earlier projected the region’s growth to hold back to 5.8 per cent in 2009 from an estimated 6.9 per cent last year.
The worldwide downturn has struck export-driven economies harder. Exports from South Korea, Taiwan, and Singapore have dipped to double digits recently as American and European consumers spent less on cars and gadgets. Kuroda said the impact of the crisis could result in a boost in unemployment, slower growth rates and depressed stock markets.