Economy of Serbia and Montenegro

The FR Yugoslavia suffered significantly economically due to the loss of previous territories of the SFRY to the seceding states and due to mismanagement of the economy, and an extended period of economic sanctions. In the early 1990s, the FRY suffered from hyperinflation of the Yugoslav dinar. By the mid 1990s, the FRY had overcome the inflation. Further damage to Yugoslavia's infrastructure and industry caused by the Kosovo War left the economy only half the size it was in 1990. Since the ousting of former Federal Yugoslav President Slobodan Milošević in October 2000, the Democratic Opposition of Serbia (DOS) coalition government has implemented stabilization measures and embarked on an aggressive market reform program. After renewing its membership in the International Monetary Fund in December 2000, Yugoslavia continued to reintegrate with other world nations by rejoining the World Bank (IBRD) and the European Bank for Reconstruction and Development (EBRD).

The smaller republic of Montenegro severed its economy from federal control and from Serbia during the Milošević era. Afterwards, the two republics had separate central banks whilst Montenegro began to use different currencies - it first adopted the Deutsch mark, and continued to use it until the mark fell into disuse to be replaced by euro. Serbia continued to use the Yugoslav Dinar, renaming it the Serbian dinar.

The complexity of the FRY's political relationships, slow progress in privatisation, and stagnation in the European economy were detrimental to the economy. Arrangements with the IMF, especially requirements for fiscal discipline, were an important element in policy formation

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