Serbia and Montenegro - Economic development



Officials in general see revitalization of the infrastructure (roads, rail and air transport, telecommunications, and power production) as one step toward economic recovery. Another important aspect of economic reconstruction will be the revival of former export industry, such as agriculture, textiles, furniture, pharmaceuticals, and nonferrous metallic ores.

The Kosovo war in 1999 left much of Serbia's infrastructure in ruins, but reconstruction efforts were proceeding slowly in the early 2000s. The new government that came to power in 2000 faced numerous economic challenges. Nevertheless, inflation decreased sharply from 113% at the end of 2000 to 23% in April 2002. Gross domestic product (GDP) rose by 5.5% in 2001. In 2002, the International Monetary Fund (IMF) approved a three-year $829 million Extended Arrangement to support Serbia and Montenegro's (then Yugoslavia's) 2002–05 economic program. In 2002, the dinar became convertible. Privatization has been slow, and foreign direct investment lagged in the early 2000s.

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