California has just made a big leap in the global economic rankings. According to updated figures from the International Monetary Fund and the US Bureau of Economic Analysis, the state’s economy has now outgrown Japan’s. California’s nominal GDP has touched 4.1 trillion dollars, slightly ahead of Japan’s 4.02 trillion.
This means only three economies are currently bigger than California, the United States as a whole, China, and Germany. It’s a moment that shows just how much California is pulling ahead, not just within the US, but across the world.
Why California matters in the US economy
California is not just any state, it plays a central role in keeping America’s economy moving. It’s the leading state in manufacturing, produces the most food, and is home to the country’s top tech companies and the global entertainment industry. That combination makes it a powerful economic engine.
In fact, the money California contributes to the federal government outweighs what it receives back by around 83 billion dollars, according to a statement from Governor Gavin Newsom’s office.
Governor Newsom said California isn’t just keeping pace with global economies, it’s leading the way. He credited the state’s success to investing in people, focusing on sustainability, and encouraging innovation.
Growing faster than most countries
What’s even more impressive is California’s growth rate. In 2024, its economy expanded by 6 percent. That’s higher than the US national growth of 5.3 percent, and far above China’s 2.6 percent and Germany’s 2.9 percent.
To put this in perspective, just six years ago, California passed the United Kingdom to become the world’s fifth-largest economy. Now it has moved one step further by overtaking Japan.
Concerns over Federal Trade Policies
But it’s not all smooth sailing. Governor Newsom raised concerns about how certain national policies could affect the state’s economy. He pointed to US President Donald Trump’s trade policies, saying that reckless tariffs could put California’s progress at risk.
He made it clear that while the state celebrates this economic milestone, it must also stay alert to protect what it has built.
California’s rise to the fourth spot globally is more than just a number, it shows how regional economies can shape the bigger picture. Its success story is a mix of innovation, investment, and strong local industries. But like any fast-growing region, it faces challenges too, especially when national policies don’t align with local needs.
