The swift collapse of the Yugoslav Federation in 1991 was followed by war, the destabilization of republic boundaries, and the break-up of important inter-republic trade flows. Output in Serbia and Montenegro dropped by half in 1992-93. Like the other former Yugoslav republics, it had depended on its sister republics for large amounts of energy and manufacturing. The break-up of many of the trade links, the sharp drop in output as industrial plants lost suppliers and markets, and the destruction of physical assets in the fighting all have contributed to the economic difficulties of the republics. Hyperinflation ended with the establishment of a new currency unit in June 1993; prices were relatively stable from 1995 through 1997, but inflationary pressures resurged in 1998. Reliable statistics continue to be hard to come by, and the GDP estimate is extremely rough (GDP per capita was estimated at $1,800 in 1999). The economic boom anticipated by the government after the suspension of UN sanctions in December 1995 failed to materialize. Damage to Serbia's infrastructure and industry by the NATO bombing during the war in Kosovo added to the problems.14
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