Economy of Serbia and Montenegro

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As the economy of the Socialist Federal Republic of Yugoslavia collapsed and entered a prolonged decline in 1989, the country broke up into five new sovereign states by 1992, independence of which was fought over in a series of Yugoslav Wars. The rump state that continued to designate itself as 'Yugoslavia' (Federated Republic of) was established as a confederation of two of these successor states, Serbia and Montenegro.

With hyperinflation exacerbated by the economic embargo imposed during the Bosnian War, the Federal Republic of Yugoslavia (FRY) economy's downward spiral showed no real sign of recovery until 1995. GDP was nowhere near its 1990 level, but the 1999 NATO bombing of Yugoslavia of the basic infrastructure of the country and many factories, as well as a renewed embargo, caused a further huge drop in GDP in relation to the 1991 level. The first sign of an economic recovery occurred in 2001 after the overthrow of Slobodan Milošević, which occurred on 5 October 2000. A vigorous team of economic reformers worked to tame inflation (non-energy inflation is less than 9% in 2002, down from over 120% two years earlier) and rationalize the Serbian and Montenegrin economy. By January 2005, GDP recovered to 55-60% of its 1990 level, due to GDP growth of 8.5% in 2004.^{[citation needed]}

Following the 2006 Montenegrin independence referendum, the union dissolved as Montenegro became an independent country. Thereafter, the economy of Montenegro and economy of Serbia would follow different trajectories.