California has replaced Japan as the world’s fourth-largest economy, according to newly released data from the International Monetary Fund and the U.S. Bureau of Economic Analysis.
According to BEA data and the IMF’s 2024 World Economic Outlook released Tuesday, California’s nominal gross domestic product rose to $4.1 trillion, surpassing Japan’s $4.02 trillion. The top three GDPs belong to the United States, China and Germany.
California’s GDP figure is based on the latest state-level GDP data from the BEA, according to Gov. Gavin Newsom’s office.
“California isn’t just keeping pace with the world — we’re setting the pace,” Newsom said in a statement. “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.”
According to an April 2 executive order by Trump, “Underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States. That threat has its source in whole or substantial part outside the United States in the domestic economic policies of key trading partners and structural imbalances in the global trading system. I hereby declare a national emergency with respect to this threat.”
The state’s economy is growing at a faster rate than the U.S., China and Germany. California’s 2024 growth rate was 6%, outpacing the U.S. with 5.3%, China’s 2.6% and Germany with 2.9%. The state’s GDP growth was 7.5% from 2021 to 2024.
Projections based on preliminary data indicate India, which currently is the world’s sixth-largest economy, will surpass California by 2026.
Newsom’s office noted the state’s increasing population and recent record-high revenue from tourism, as well as its position as the “top state for new business starts, access to venture capital funding and manufacturing, high-tech and agriculture.” The state is the nation’s leading agricultural producer and is also the center for manufacturing output in the U.S., with more than 36,000 manufacturing companies employing over 1.1 million California residents.
The Golden State’s manufacturing firms have created new industries and supplied the world with manufactured goods spanning aerospace, computers, electronics and most recently, zero-emission vehicles.
A key driver of the nation’s economic growth, California sends over $83 billion more to the federal government than it receives in federal funding, according to Newsom’s office.
Last week Newsom and Attorney General Rob Bonta filed a lawsuit in federal court challenging President Donald Trump’s use of emergency powers to enact broad-sweeping tariffs.
“The lawsuit seeks to end President Trump’s tariff chaos, which has wreaked havoc on the economy, destabilized the stock and bond markets, caused hundreds of billions of dollars in losses and inflicted higher costs for consumers and businesses,” according to the governor’s office. “These harms will only continue to grow, as President Trump’s tariffs are projected to shrink the U.S. economy by $100 billion annually.”
The IMF and BEA data are available on their respective websites.
