California's Economy Surpasses Japan's
The state’s rapid growth, driven by the technology and clean energy sectors, has propelled California's economy past Japan to become the fourth-largest in the world, according to an announcement from Governor Gavin Newsom. As reported by the...
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The state’s rapid growth, driven by the technology and clean energy sectors, has propelled California's economy past Japan to become the fourth-largest in the world, according to an announcement from Governor Gavin Newsom.
As reported by the International Monetary Fund and the US Bureau of Economic Analysis earlier this week, California's nominal GDP reached $4.1 trillion in 2024, slightly surpassing Japan's $4.02 trillion. California now ranks just behind the United States, with its economy at $29.18 trillion, China at $18.74 trillion, and Germany at $4.65 trillion.
“California isn’t just keeping pace with the world – we’re setting the pace,” Newsom asserted in a statement on Wednesday. “Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation.”
The state has also outperformed the leading three economies in terms of growth, expanding by 6% last year, surpassing the US average of 5.3%, China's 2.6%, and Germany's 2.9%. Over the last four years, California's economy has grown at an average nominal rate of 7.5%.
Analysts believe that California's impressive progress is due to its flourishing technology, entertainment, and clean energy industries. With nearly 40 million residents, it is the most populous state in the US and excels in manufacturing, agriculture, and tourism.
In contrast, Japan's economy has faced challenges. Although there was a small increase in GDP last quarter, the IMF recently lowered its growth forecast for Japan to 0.6% for 2025, down from the previously expected 1.1%, following a mere 0.1% rise in 2024. Economists point to Japan's dwindling workforce, stagnant labor productivity, and rapidly increasing commodity prices as significant barriers to ongoing growth.
“Japan’s economic fundamentals remain weak,” analysts at Deloitte noted this week, cautioning that without meaningful reforms to enhance innovation and efficiency, the nation's long-term economic outlook is bleak.
They also warned that external factors could exacerbate Japan's economic struggles. Earlier this month, US President Donald Trump enforced a 24% tariff on Japanese exports, though many of these tariffs are paused until July. A 10% base tariff remains in effect, along with a 25% duty on automobiles. These tariffs are expected to further burden Japan's export-driven economy, particularly since the US was its largest export market in 2024.
Meanwhile, California has actively opposed Trump's tariffs, becoming the first state to sue the Trump administration over the new duties. Officials argue that the tariffs would negatively impact essential California industries, such as agriculture and technology.
“We’re not going to sit back while reckless trade wars endanger the livelihoods of millions of Californians,” Newsom declared.
Rohan Mehta for TROIB News
As reported by the International Monetary Fund and the US Bureau of Economic Analysis earlier this week, California's nominal GDP reached $4.1 trillion in 2024, slightly surpassing Japan's $4.02 trillion. California now ranks just behind the United States, with its economy at $29.18 trillion, China at $18.74 trillion, and Germany at $4.65 trillion.
“California isn’t just keeping pace with the world – we’re setting the pace,” Newsom asserted in a statement on Wednesday. “Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation.”
The state has also outperformed the leading three economies in terms of growth, expanding by 6% last year, surpassing the US average of 5.3%, China's 2.6%, and Germany's 2.9%. Over the last four years, California's economy has grown at an average nominal rate of 7.5%.
Analysts believe that California's impressive progress is due to its flourishing technology, entertainment, and clean energy industries. With nearly 40 million residents, it is the most populous state in the US and excels in manufacturing, agriculture, and tourism.
In contrast, Japan's economy has faced challenges. Although there was a small increase in GDP last quarter, the IMF recently lowered its growth forecast for Japan to 0.6% for 2025, down from the previously expected 1.1%, following a mere 0.1% rise in 2024. Economists point to Japan's dwindling workforce, stagnant labor productivity, and rapidly increasing commodity prices as significant barriers to ongoing growth.
“Japan’s economic fundamentals remain weak,” analysts at Deloitte noted this week, cautioning that without meaningful reforms to enhance innovation and efficiency, the nation's long-term economic outlook is bleak.
They also warned that external factors could exacerbate Japan's economic struggles. Earlier this month, US President Donald Trump enforced a 24% tariff on Japanese exports, though many of these tariffs are paused until July. A 10% base tariff remains in effect, along with a 25% duty on automobiles. These tariffs are expected to further burden Japan's export-driven economy, particularly since the US was its largest export market in 2024.
Meanwhile, California has actively opposed Trump's tariffs, becoming the first state to sue the Trump administration over the new duties. Officials argue that the tariffs would negatively impact essential California industries, such as agriculture and technology.
“We’re not going to sit back while reckless trade wars endanger the livelihoods of millions of Californians,” Newsom declared.
Rohan Mehta for TROIB News
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