The economy of Serbia is a service-based upper-middle income economy in Central Europe, with the tertiary sector accounting for two-thirds of total gross domestic product (GDP). The economy functions on the principles of the free market. Nominal GDP in 2023 is projected to reach $72.587 billion, which is $10,850 per capita, while GDP based on purchasing power parity (PPP) stood at $175.318 billion, which is $26,205 per capita. The strongest sectors of Serbia's economy are energy, the automotive industry, machinery, mining, and agriculture. The country's primary industrial exports are automobiles, base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, and pharmaceuticals. Trade plays a major role in Serbian economic output. The main trading partners are Germany, Italy, Russia, China, and neighbouring Balkan countries. Belgrade is the capital and economic heart of Serbia and home to most major Serbian and international companies operating in the country, as well as the National Bank of Serbia and the Belgrade Stock Exchange. Novi Sad and Niš are the second and third largest cities respectively and the most important economic hubs after Belgrade. Historical preview In the decades leading up to World War I, GDP growth in Serbia grew by 0.28% per annum. This was a slower growth rate than north-western Europe, leading to a widening economic divergence between Serbia and Western Europe. Prior to WWI, there was extensive growth in Serbia's dominant agricultural sector. However, industrial and service sectors remained small. In the late 1980s, at the beginning of the process of economic transition from a planned economy to a market economy, Serbia's economy had a favourable position in comparison to most of the Eastern Bloc countries, but it was gravely impacted by poor economic decision making in the 1990s, the Yugoslav Wars, and UN sanctions and trade embargo during the 1990s. At the same time, the country experienced a serious "brain drain". There was a severe recession which continued until 1999. After the overthrow of Slobodan Milošević in 2000, Serbia went through a process of transition to a market-based economy and experienced fast economic growth. During that period, the Serbian economy grew 4-5% annually, average wages quadrupled, and economic and social opportunities dramatically improved. During the Great Recession, Serbia marked a decline in its economy of 3.1% in 2009, and following years of economic stagnation pre-crisis level of GDP was reached only in 2016. Since 2014, the country has been in the