Serbia has an economy based mostly on various services, which account for about 63% of the GDP. In the late 1980s, at the beginning of the process of economic transition from the planned economy to the free market, Serbia's economy had a favorable position, but it was gravely impacted by UN economic sanctions 1992-1995, as well as excessive damage to infrastructure and industry during the NATO bombing in 1999. Total damage of NATO bombing is estimated at $30 billion in a detailed study done by 17 renewed economists.
After the ousting of former Federal Yugoslav President Slobodan Milosevic in October 2000, the country went through the economic liberalization, and experienced fast economic growth (GDP per capita went from $1,160 in 2000 to $6,782 in 2008). Furthermore, it has been preparing for the membership in the European Union, its most important trading partner. Estimated GDP (PPP) of Serbia for 2008 is $78.83 billion which is $10 679 per capita. At present, main economic problems are high unemployment rate (14%) and large trade deficit ($11 billion). Being the only European country with free trades agreements with both the EU and Russia, Serbia expects more economic impulses and high growth rates in the coming years.
In recent years, Serbia has seen an increasingly swift foreign direct investment trend, including many blue-chip companies (US Steel, Philip Morris, Microsoft, FIAT, Lukoil, Coca-Cola, Gazprom, Lafarge, Siemens, Carlsberg...). By countries, most cash investments in 2000-2007 period came from Austrian companies ($2.2bn), followed by those from Greece ($1.6bn), Norway ($1.6bn), and Germany ($1.4bn). Companies from these four EU countries account for two thirds of all cash investments in that period. More investments are expected in the future, with talks already starting with Volkswagen on possible automobile assembly, as well as with Ikea (furniture manufacturer willing to invest approximately US$2 Billion in southern Serbia) and General motors (for the construction of locomotive engines).