California Retains Title As World’s 5th Largest Economy

According to a new report by the International Monetary Fund (IMF) this week, California remains the world’s 5th largest economy, leading sixth place India and falling under fourth-place Japan.

The 2024 World Economic Growth Projects Report found that the United States, in terms of Nominal GDP, was at $27.36 trillion in 2023, up from $25.7 trillion in 2022. The next closest economy, China, stood at only $17.66 trillion in 2023, followed by Germany with $4.4 trillion and Japan with $4.2 trillion.

When broken down by individual states, California still had by far the largest individual economy. Coming in 5th place once again, California had a $3.86 trillion economy in 2023, up from $3.64 trillion in 2022. According to the U.S. Bureau of Economic Analysis, the state had an overall 6.1% growth rate. The next highest state, Texas, had a $2.56 trillion economy in 2023, coming at a slower growth rate than California as they had been at $2.4 trillion in 2022. The third highest state was New York, with $2.15 trillion in 2023.

While many factors played against California in recent years, such as recovery from the pandemic, many companies moving out of state,  state population losses, and massive tech job losses in the Bay Area, the state has shown to rebound economically in recent years. A high population mixed with many pandemic-resistant industries and many growth areas led the state to continue to grow.

“California continues to punch above its weight, overperforming all but a handful of the largest countries in the world,” said Governor Newsom of the report on Wednesday. “And with our unparalleled combination of innovation, higher education, a talented workforce, diverse industries, and unparalleled natural resources, we will continue to do so well into the future.”

While many experts agreed that those were factors contributing to California’s high marks, they noted that the number of overall opportunities were still strong despite Government overview.

“Businesses in California have felt squeezed for quite some time, especially with high taxation and more and more regulations,” explained economist Mia Malone to the Globe on Wednesday. “But it has proved resilient to that too. There are so many people here, so many different industries and pretty much a bit of everything. Businesses can still succeed and grow here. Is it harder? Yes, and some do leave. But look at all the tech firms in Silicon Valley, all the media companies in LA, all the large warehouse and freight companies in the Inland Empire. There’s new construction, agriculture, mining, tourism. This is why California succeeds even with all the drawbacks. There is just so much to build on.

“If the government reigned back a bit, the economy here would truly expand. I mean, they are fifth in the world right now. They have a bigger economy than India, and they have the most people in the world. That’s how productive California is. That is how much they contribute. California is $3.86 trillion of the U.S. $27.3 trillion economy. Very roughly, that’s 14%. That is how much of an advantage California is at. It’s really a lot.”

More studies on California’s economic situation are due out soon.