California’s economy continues to dominate and develop faster than the world’s top economies, with fresh data revealing that it has surpassed Japan to become the world’s fourth-largest economy.
California has officially overtaken Japan to become the world’s fourth-largest economy, according to newly released data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis (BEA).
According to the IMF’s 2024 World Economic Outlook data released yesterday, and BEA data, California’s nominal GDP reached $4.1 trillion, surpassing Japan’s $4.02 trillion, and placing California behind only the United States, China, and Germany in global rankings. California’s GDP figure is based on the latest state-level GDP data from the BEA.
California’s economy is growing at a faster rate than the world’s top three economies. In 2024, California’s growth rate of 6% outpaced the top three economies: U.S. (5.3%), China (2.6%) and Germany (2.9%). California’s success is long-term –the state’s economy grew strongly over the last four years, with an average nominal GDP growth of 7.5% from 2021 to 2024. Preliminary data indicates India is projected to surpass California by 2026.
Governor Gavin Newsom is defending California’s economy, having filed a lawsuit in federal court last week contesting the president’s use of emergency powers to impose broad-based tariffs that harm states, consumers, and businesses.
The lawsuit seeks to put an end to President Trump’s tariff mayhem, which has created havoc on the economy, destabilized the stock and bond markets, resulted in hundreds of billions of dollars in damages, and increased consumer and company prices. These negative consequences will only worsen, as President Trump’s tariffs are expected to reduce the US economy by $100 billion per year.
California is the leading state for new business starts, access to venture capital investment, manufacturing, high-tech, and agriculture, owing to its growing population and recent record-high tourism spending.
The state drives national economic growth while simultaneously sending over $83 billion more to the federal government than it receives in federal aid. California is the nation’s biggest agricultural producer and the hub of manufacturing output in the United States, with over 36,000 manufacturing enterprises employing over 1.1 million Californians.
The Golden State’s manufacturing firms have created new industries and supplied the world with manufactured goods spanning aerospace, computers and electronics, and, most recently, zero-emission vehicles.