California, October 15, 2025
News Summary
California has officially surpassed Japan to become the world’s fourth-largest economy, achieving a nominal GDP of $4.1 trillion. The state’s economy grew by 6%, exceeding the growth rates of the U.S., China, and Germany. Governor Gavin Newsom highlighted California’s dynamic position in the global economy, driven by investments in sustainability, innovation, and a growing workforce. Despite its success, California faces challenges such as high living costs and a homelessness crisis, underscoring a complex picture for its future.
California has officially surpassed Japan to become the world’s fourth-largest economy, achieving a nominal gross domestic product (GDP) of $4.1 trillion at the end of 2024. This impressive figure exceeds Japan’s nominal GDP of $4.02 trillion. California now ranks just behind the United States, which has a GDP of $29.18 trillion, China at $18.74 trillion, and Germany at $4.65 trillion.
The state’s economy experienced a robust 6% growth rate in 2024, outperforming the growth rates of the U.S. at 5.3%, China at 2.6%, and Germany at 2.9%. Governor Gavin Newsom announced the new rankings, highlighting California’s dynamic economic position in the global landscape with the statement that California is not just keeping pace with the world but is setting the pace.
Factors Contributing to Growth
Several factors have been crucial to California’s economic performance. The state has seen significant investments in people, a dedication to sustainability, and relentless innovation. Additionally, California’s population continues to grow, primarily due to immigration and natural birth rates, even amid an ongoing affordable housing crisis. The state is recognized as a leader in the technology sector, with approximately 20% of its workforce employed in this industry. Furthermore, California maintains its status as the largest agricultural producer in the U.S., exporting around $24.3 billion worth of commodities in 2023.
Federal Contributions and Legal Challenges
California significantly contributes to the federal government, providing $83 billion more annually in federal taxes than it receives in federal support. Governor Newsom’s administration has filed a lawsuit against the Trump administration concerning tariffs believed to jeopardize the state’s economic interests. This lawsuit emphasizes that California’s economic power is crucial for the nation and warrants protection.
Historical Context and Economic Factors
The state previously held a global ranking of fifth, which it achieved in 2017. California ascended to fourth place in 2023 before reclaiming this spot in early 2025. Economic experts suggest that fluctuations in currency exchange rates, particularly the depreciation of the Japanese yen against the dollar, may have influenced California’s climb in rankings. The International Monetary Fund (IMF) has issued a cautious outlook for global economic growth, noting potential risks such as prolonged uncertainty, protectionism, and financial market corrections.
Ongoing Challenges
Despite California’s improving economic indicators and remarkable ranking, the state still faces several significant challenges. High living costs and a substantial homelessness crisis continue to be pressing issues that need to be addressed. The balancing act between economic growth and the ongoing challenges presents a complex picture for California’s future.
Conclusion
California’s rise to become the fourth-largest economy globally marks a significant milestone in its economic history and emphasizes the state’s influential position on the world stage. As it continues to grow, attention will be on how the state addresses its challenges while leveraging its strengths in technology, agriculture, and federal contributions.
FAQ
What is California’s nominal GDP as of 2024?
California’s nominal GDP reached $4.1 trillion at the end of 2024.
How does California’s economy compare to Japan’s?
California’s nominal GDP surpasses Japan’s nominal GDP of $4.02 trillion.
What are some major contributions to California’s economic performance?
Factors contributing to California’s economic performance include significant investments in people, a focus on sustainability, and innovation.
What challenges does California face despite its economic growth?
California faces ongoing challenges such as high living costs and a substantial homelessness crisis.
Key Features
| Feature | Details |
|---|---|
| Nominal GDP (2024) | $4.1 trillion |
| Rank | 4th (behind the U.S., China, and Germany) |
| Growth Rate (2024) | 6% |
| Agricultural Exports (2023) | $24.3 billion |
| Surplus in Federal Taxes | $83 billion |
| Workforce in Technology Sector | 20% |
Deeper Dive: News & Info About This Topic
- Los Angeles Times: California’s Economy is Now the 4th Largest in the World
- Wikipedia: Gross Domestic Product
- The Guardian: California Economy Surpasses Japan
- Google Search: California economy
- Business Insider: California’s Economy Becomes Fourth-Largest
- Encyclopedia Britannica: Economy
- USA Today: California GDP Ranked
- Google News: California economy news
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
