Victoria boasts a strong, diversified economy, contributing roughly 22% to Australia's Gross Domestic Product (GDP). Historically a manufacturing powerhouse, the state's economy has transitioned over the last few decades into a highly developed knowledge and service-based economy.
The cost of living, particularly in Melbourne, is relatively high, though generally slightly lower than Sydney. Major economic strengths include financial and insurance services, professional services, healthcare, international education, and tourism. Despite the decline of traditional automotive manufacturing, advanced manufacturing (biotech, defense, aerospace) remains a key pillar. The state is continually investing in large-scale public infrastructure to support its growing population and future economic development.