In a landmark economic development, California has officially overtaken Japan to become the world’s fourth-largest economy, according to newly released data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis (BEA) . Governor Gavin Newsom announced the achievement, highlighting California’s robust growth and diverse economic sectors.
A Milestone Achievement
California’s nominal Gross Domestic Product (GDP) reached $4.1 trillion in 2024, surpassing Japan’s $4.02 trillion. This places California behind only the United States, China, and Germany in terms of economic size . The state’s economy grew at a rate of 6% in 2024, outpacing the U.S. national growth rate of 5.3%, as well as China’s 2.6% and Germany’s 2.9% .
Governor Newsom stated, “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.”
Diverse Economic Drivers
California’s economic strength is rooted in its diverse industries:
Technology: Home to Silicon Valley, California hosts tech giants like Apple, Alphabet, and Nvidia.
Entertainment: Los Angeles remains the epicenter of the global film and television industry.
Agriculture: The Central Valley is one of the most productive agricultural regions globally, leading in the production of dairy, almonds, and grapes.
Manufacturing and Trade: With the busiest port in the U.S. (Port of Los Angeles), California plays a pivotal role in the global supply chain, handling about 40% of goods imported to the U.S.
Challenges Ahead
Despite this economic triumph, California faces ongoing challenges:
Housing Affordability: The state continues to grapple with high housing costs, contributing to a homelessness crisis.
Federal Trade Policies: Governor Newsom has expressed concerns over the federal government’s tariff policies, which he believes threaten California’s economic interests. The state has filed a lawsuit challenging the legality of these tariffs, arguing that only Congress has the authority to impose them.
Looking Forward
California’s ascent to the fourth-largest economy underscores its resilience and adaptability. As the state continues to navigate internal challenges and external pressures, its commitment to innovation and sustainability positions it well for future growth.
