California’s economy has reached a new milestone, now ranking as the fourth-largest economy globally with a nominal gross domestic product (GDP) of $4.1 trillion as of the end of 2024. This achievement places the state ahead of Japan, whose GDP stands at $4.02 trillion, and behind only the United States ($29.18 trillion), China ($18.74 trillion), and Germany ($4.65 trillion).
This economic leap underscores California’s significant role on the global stage, reflecting its diverse and dynamic economic base. The state’s economy grew at a rate of 6% in 2024, outpacing the growth rates of the top three economies: the U.S. at 5.3%, China at 2.6%, and Germany at 2.9%. Over the past four years, California’s average nominal GDP growth has been an impressive 7.5%, signaling sustained expansion and resilience.
Several factors contribute to California’s economic strength. The state benefits from a growing population and robust tourism spending, which have bolstered consumer demand. It also hosts a high concentration of venture capital and new business ventures, particularly in high-tech sectors. Additionally, California maintains leadership in agriculture, manufacturing, and the entertainment industry, while its two largest seaports facilitate substantial trade activity.
Governor Gavin Newsom highlighted these strengths, stating, “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.” He emphasized that the state’s economic success is rooted in its commitment to innovation and sustainable growth.
However, Newsom also expressed concerns about federal trade policies, particularly tariffs imposed by the previous administration, which he described as “reckless” and potentially harmful to California’s economic advancement. These tariffs, including a 10% duty on most imports and higher tariffs on goods from China, Mexico, and Canada, have sparked trade tensions and market disruptions. Newsom has challenged the authority behind these tariffs, arguing they threaten the state’s economic future.
The state’s economic ranking reflects data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis (BEA). If California were an independent country, its economy would rank just behind Germany, the world’s third-largest economy, and ahead of Japan, the fifth largest.
Looking ahead, preliminary projections suggest that India may surpass California’s economy by 2026, indicating the dynamic nature of global economic rankings. Nonetheless, California’s current position as the fastest growing among the top four economies highlights its ongoing economic vitality.
California’s ascent to the fourth largest economy globally underscores its economic diversity, innovation capacity, and growth momentum. While challenges remain, particularly in the realm of trade policy, the state continues to be a major economic driver within the United States and the world.
