State news: California passes Japan to become fourth-largest world economy
California State Capitol.
Governor cites new data showing California outpaces Japan in GDP
– California has officially surpassed Japan to become the fourth-largest economy in the world, according to newly released data from the International Monetary Fund and the U.S. Bureau of Economic Analysis, Governor Gavin Newsom announced on April 23.
“California isn’t just keeping pace with the world—we’re setting the pace. Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation. And, while we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration. California’s economy powers the nation, and it must be protected,” Newsom said in a statement.
The latest World Economic Outlook from the International Monetary Fund, combined with state-level gross domestic product data from the U.S. Bureau of Economic Analysis, shows California’s nominal GDP reached $4.1 trillion. That figure surpasses Japan’s $4.02 trillion and places California behind only the United States, China and Germany in global economic rankings.
California’s economy is growing faster than the world’s three largest economies. In 2024, the state’s economy expanded by 6 percent, outpacing the United States at 5.3 percent, China at 2.6 percent and Germany at 2.9 percent. From 2021 through 2024, California averaged 7.5 percent annual GDP growth. Preliminary projections indicate India may surpass California by 2026.
California remains the leading contributor to national economic output. The state leads the nation in new business starts, access to venture capital, and output in manufacturing, high technology and agriculture. It also reported an increasing population and record-high tourism spending.
California sends more than $83 billion to the federal government than it receives in federal funding. It is the top agricultural producer in the United States and the center of national manufacturing output, with over 36,000 manufacturing firms employing more than 1.1 million people.
California’s manufacturing sector supports a wide range of industries including aerospace, computers, electronics, and zero-emission vehicles.
Last week, Governor Newsom filed a lawsuit in federal court challenging the president’s use of emergency powers to impose tariffs. The lawsuit seeks to end what the state describes as damaging trade measures that have disrupted the economy, markets, and supply chains. California officials cite projections that the federal tariffs could shrink the U.S. economy by $100 billion annually.
