Serbia and Montenegro - Economy

During the UN economic sanctions that lasted from 1992 to 1995, economic activity was extremely limited. By 1994, hyperinflation had brought formal economic activity to a virtual halt. By 1996, GDP had fallen to only 50.8% of 1990s total. Industry declined to just 46.6% of 1990s output; agriculture, 94.4%; construction, 37.5%; transportation, 29.3%; trade, 60.6%; and services, 81.1%. Formal lifting of these sanctions occurred in October 1996. However, the United States sponsored an "Outer Wall" of sanctions, which prevented Yugoslavia from joining international organizations and financial institutions. Taken together, the "Outer Wall," the Kosovo war, and continuing corruption continue to stifle Yugoslav economic development. In October 2000, the coalition government began implementation of stabilization and market-reform measures. Real growth in 2000 was reported as 5%. A donors' conference in June 2001 raised $1.3 billion in pledges for help in infrastructural rebuilding. Real GDP in 2001 was 5.5% and an estimated 4% in 2002. The average lending rate, at 79.6% in 2000 dropped to 33.2% in 2001, reflecting some improvement in economic security. The IMF projected a 4% GDP growth rate for 2002.