California overtakes Japan to become world's fourth-largest economy
California has officially surpassed Japan to become the fourth-largest economy in the world, Governor Gavin Newsom announced on Wednesday, citing data from the International Monetary Fund (IMF) and the US Bureau of Economic Analysis (BEA).
The state’s nominal GDP reached $4.1 trillion, pushing it ahead of Japan’s $4.02 trillion and trailing only the United States, China, and Germany.
According to the IMF’s 2024 World Economic Outlook and recent BEA figures, California’s economy continues to outpace global powerhouses. With a growth rate of 6% in 2024, the state is ahead of the United States (5.3%), China (2.6%), and Germany (2.9%).
NEW: California is now the FOURTH largest economy in the world.
Last year, the Golden State's GDP topped $4.1T — surpassing Japan ($4.02T) and behind only Germany ($4.65T), China ($18.74T), and the entire U.S. ($29.18T). pic.twitter.com/6k1rR9GttLThe full report released by Newsom's press office revealed that, over the past four years, California’s average GDP growth rate has held steady at 7.5%, cementing its place as a long-term economic leader.
Governor Newsom attributed the state’s economic success to policies centred around sustainability, innovation, and investment in people.
“California isn’t just keeping pace with the world—we’re setting the pace,” Newsom said in a statement. “While we celebrate this success, we also recognise the threat reckless federal tariff policies pose to our progress.”
California continues to drive national economic growth. The state leads the U.S. in new business starts, venture capital funding, and output in manufacturing, agriculture, and high technology.
More than 36,000 manufacturing firms in California employ over 1.1 million people, producing goods across sectors such as aerospace, electronics, and zero-emission vehicles.
Tourism also plays a critical role, with recent record-high spending contributing to the state’s expanding economy. At the federal level, California contributes over $83 billion more than it receives, highlighting its role as the backbone of national economic strength.
In response to federal trade policy, Newsom filed a lawsuit last week challenging President Trump’s use of emergency powers to impose tariffs.
The suit argues the tariffs have destabilised markets and imposed excessive costs on businesses and consumers, with estimates suggesting the measures may shrink the U.S. economy by $100 billion annually.