California, October 15, 2025
News Summary
California has officially surpassed Japan to become the world’s fourth-largest economy, with a nominal GDP of $4.1 trillion by the end of 2024. Governor Gavin Newsom announced that the state is leading the way, driven by growth in technology, agriculture, and substantial investments in its workforce. Despite facing challenges such as high living costs and a homelessness crisis, the state continues to thrive economically, outperforming major global competitors in growth rates.
California has officially surpassed Japan to become the world’s fourth-largest economy, achieving a nominal gross domestic product (GDP) of $4.1 trillion by the end of 2024. This remarkable growth means California now only trails the United States, China, and Germany in terms of economic size, having outpaced Japan’s nominal GDP of $4.02 trillion. The state’s economic growth rate of 6% in 2024 notably exceeded growth rates in the U.S. (5.3%), China (2.6%), and Germany (2.9%).
Governor Gavin Newsom announced the new economic rankings, stating that the state is “not just keeping pace with the world – we’re setting the pace.” Various key factors contributed to California’s robust economic performance, including substantial investments in its workforce, a commitment to sustainability, and a continued emphasis on innovation. The state’s growing population, primarily driven by immigration and natural birth rates, has further fueled economic activity, even amid ongoing challenges associated with an affordable housing crisis.
A major driving force behind California’s economy is its thriving technology sector, which employed 20% of the state’s workforce. The state also leads the nation in agricultural production, exporting approximately $24.3 billion worth of commodities in 2023. Additionally, California’s economic contributions extend beyond its state borders, contributing an impressive $83 billion more each year in federal taxes than it receives in federal support.
Governor Newsom’s administration has proactively addressed potential economic threats, as evidenced by the lawsuit filed against the Trump administration, which challenged tariff policies considered detrimental to California’s economic interests. This lawsuit emphasizes the significance of California’s economic power on a national scale and asserts that it must be protected for the benefit of all.
California’s ascent to the fourth spot on the global economic stage was not without its historical shifts. The state previously ranked fifth and achieved this position in 2017 before reclaiming fourth place in 2023 and holding it steadily into 2025. Economic experts indicate that fluctuations in currency exchange rates, particularly the depreciation of the Japanese yen against the dollar, may have played a role in California’s current standing.
While California celebrates its economic achievements, it faces several ongoing challenges. The state grapples with high living costs and a significant homelessness crisis. Furthermore, the International Monetary Fund (IMF) has issued a cautious outlook on global economic growth, citing risks such as prolonged uncertainty, protectionism, and potential financial market corrections, which could impact California’s economic trajectory.
In summary, California has taken a significant leap forward in the global economy, with positive growth attributed to a variety of factors including innovation, a solid workforce, and its agricultural base, all while navigating critical challenges that persist in its socioeconomic landscape.
Frequently Asked Questions (FAQ)
What is California’s nominal GDP as of the end of 2024?
California’s nominal gross domestic product (GDP) reached $4.1 trillion at the end of 2024.
Which countries does California rank behind in terms of economic size?
California now ranks behind only the United States ($29.18 trillion), China ($18.74 trillion), and Germany ($4.65 trillion) in terms of economic size.
What was California’s growth rate in 2024?
The state experienced a growth rate of 6% in 2024, outperforming the U.S. (5.3%), China (2.6%), and Germany (2.9%).
What are some contributing factors to California’s economic performance?
Factors contributing to California’s economic performance include significant investments in people, a focus on sustainability, and innovation.
How much does California contribute in federal taxes compared to what it receives?
California contributes $83 billion per year more in federal taxes than it receives in federal support.
What economic challenges does California face despite its success?
Despite improving economic indicators, the state faces ongoing challenges including high living costs and a substantial homelessness crisis.
Key Features of California’s Economic Achievement
| Feature | Details |
|---|---|
| Nominal GDP | $4.1 trillion |
| Global Ranking | Fourth largest economy |
| Growth Rate (2024) | 6% |
| Major Economic Sectors | Technology, Agriculture |
| Federal Tax Contribution | $83 billion more in federal taxes than received |
| Challenges | High living costs, homelessness crisis |
Deeper Dive: News & Info About This Topic
- Los Angeles Times: California’s economy is now the 4th largest in the world, or is it?
- Visual Capitalist: Mapped: The World’s Largest Economies, Including U.S. States
- USA Today: California GDP: US states ranked
- The Guardian: California economy surpasses Japan, Governor Gavin Newsom says
- Business Insider: California economy now the fourth largest, surpassing Japan
- Wikipedia: Economy of California
- Google Search: California economy
- Encyclopedia Britannica: Economic system
- Google News: California economy
- Google Scholar: California economy
Author: STAFF HERE HUNTINGTON BEACH
The Huntington Beach Staff Writer represents the experienced team at HEREHuntingtonBeach.com, your go-to source for actionable local news and information in Huntington Beach, Orange 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 Huntington Beach Surf City USA Marathon, the U.S. Open of Surfing, Fourth of July celebrations at the Huntington Beach Pier, and community festivals at Huntington Beach Central Park. Our coverage extends to key organizations like the Huntington Beach Chamber of Commerce and Visit Huntington Beach, plus leading businesses in retail, hospitality, and outdoor recreation that drive the local economy. As part of the broader HERE network, including HEREAnaheim.com, HERECostaMesa.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
