Tasmania’s economy is closely integrated with, and has a similar structure to, the Australian economy. The State is prominent in the production and processing of agricultural, marine, mineral and forest products. Tourism has become an increasingly important sector based on a wide range of attractions, including major World Heritage listed wilderness areas.

Around 30 per cent of Tasmania's output is sold to mainland Australia and another 20 per cent exported overseas. This provides Tasmania with wide development opportunities, although it also leaves the State potentially susceptible to downturns in national and global economic conditions.

Tasmania is currently experiencing its best economic conditions in decades. Record, or near record, levels have been achieved in a range of economic variables, including employment, business investment and consumer spending. A sign of the confidence in Tasmania is the high level of private sector investment, both business investment and dwelling investment, which has been directed to Tasmania from interstate.

General Government net debt is expected to be zero by 2007. The improvement in the State's financial position has been acknowledged through ratings upgrades by international ratings agencies Standard and Poor's and Moody's.

Tasmania's average population for the four quarters to December 2003 was estimated to be 0.99 per cent higher than for the corresponding period to December 2002. This was the fourth highest growth rate of all states and territories in the four quarters to December 2003, behind only Queensland, Western Australia and Victoria. The improvement in population growth has been due to a sharp increase in interstate arrivals which has led to Tasmania experiencing positive net interstate migration for six consecutive quarters to December 2003. Net overseas inwards migration has also assisted Tasmania's population growth.

Current economic indicators suggest that the Tasmanian economy continued to strengthen in 2003-04 after a strong improvement in 2002-03. The improvement in the international economic climate is likely to assist Tasmania's performance in 2004-05. Due to the State's high export reliance, any major shocks to the global economy could have a negative impact on Tasmania's economy. The Tasmanian Treasury estimates Tasmania's real economic growth for the 2003-04 financial year to have been 6.0 per cent. This compares to estimated real growth for Australia as a whole during 2003-04 of 3.75 per cent (the Commonwealth Treasury estimate). The Tasmanian Treasury is also forecasting real state economic activity growth in 2004-05 of 3.2 per cent.