The Victorian economy has continued to perform well, delivering growth in real gross state product (GSP) of 2.6% in the year to June 2023. This raised Victoria’s economy to be more than 8% larger than it was in 2019, before the COVID-19 pandemic.

Although total employment in Victoria continues to increase, the growth of 82,000 jobs in the year to March 2024, is the lowest level in three years, illustrating the moderating job market. The annual unemployment rate sits at 4.1% as at March 2024 and the share of Victoria’s working-age population in employment remains close to all-time highs.

Despite high inflation and the sharp rise in interest rates, Victoria’s GSP is forecast to increase by 2.5% over the year to June 2024, outpacing all states and territories and indeed average growth of 2.3% over the five years to 2027, the highest of all Australian states.

Victorian Population Growth

There is a significant pipeline of private and public-sector construction projects in delivery, and business investment intentions remain elevated. Economic activity will also be supported by strong population growth, driven by a rebound in international student arrivals.

The Victorian economy is forecast to continue creating jobs. Leading indicators of labour demand, such as job advertisements, remain above average and support the positive employment outlook for 2024. While the unemployment rate is expected to rise modestly in this year alongside relatively subdued economic growth, it is forecast to remain at an historically low level.

Victoria’s population growth has continued to rebound strongly following the COVID-19 pandemic and ending of the associated national border restrictions. Population growth reached a high 2.9% over the year to September 2023. This was driven by net overseas migration, led by a strong rise in international students. Net overseas migration is significantly above pre-pandemic peaks.

Population growth is expected to remain strong this year, rising by 2.2%. International students are expected to continue to drive much of this growth, with Victoria’s population growth reaching a record level in September 2023 with more than 192,000 people coming to the state.

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