Shigatse's economy is primarily driven by agriculture, tourism, and increasingly by infrastructure development. The fertile Yarlung Tsangpo River valley supports agriculture, with barley, wheat, rapeseed, and vegetables as major crops. Yak and sheep herding remain important in the surrounding highland areas. The city serves as a commercial hub for southern Tibet.
Tourism is the fastest-growing sector, centered on monastery tourism, Everest expeditions, and cultural experiences. The Shigatse Peace Airport connects the city to major Chinese cities, and the railway has boosted tourist arrivals. Local handicrafts, including Tibetan carpets, thangka paintings, and religious artifacts, provide income for many families. The local economy has grown steadily with infrastructure investment and tourism development.