California falls to world's fifth-largest economy

"The Golden State economy was generating goods and services at a nationwide leading annual rate of $4.215 trillion in the second quarter - up 5% in a year, according to the BEA. That ranked fourth-best on a global scale when compared with the IMF's April scorecard - behind only the U.S., China, and Germany. But the latest IMF estimate for 2025 business output shows Japan's economy at $4.28 trillion, up 6.5% in a year. So, it reclaimed the world's No. 4 spot, surpassing the Golden State."

"GDP is a broad measure of the production of goods and services, often seen as a yardstick of economic vibrancy. This geeky economic statistic has morphed into political brownie points for the state when comparing California's business output to the world by contrasting GDP, which is priced in U.S. dollars, without adjusting for inflation. IMF stats show that right behind Japan and California is India at $4.125 trillion, up 5.5%, and the United Kingdom with $3.96 trillion, up 8.6%."

"California gained the No. 5 global ranking in 2017 and then rose to No. 4 last year following a long-running dip in the Japanese economy. This scorecard reflects both geographic economic progress and fluctuations in the U.S. currency. Japan's jump is due, in part, to its strong yen performance against the dollar in 2025."

California's GDP reached $4.215 trillion annualized in Q2 2025, a 5% year-over-year increase, according to BEA figures. The IMF's 2025 estimates place Japan at $4.28 trillion, a 6.5% increase, moving Japan into the world's fourth-largest economy and surpassing California. India follows at $4.125 trillion (up 5.5%) and the United Kingdom at $3.96 trillion (up 8.6%). The top three economies remain the United States, China, and Germany. Currency movements, including a stronger yen against the dollar in 2025, contributed to Japan's gain. California had previously risen to fourth after a long Japanese downturn.

Read at The Mercury News