California has slipped one notch in the bragging-rights totem pole to rank as the world’s fifth-largest economy in the latest update on global business output.
Using gross domestic product as the yardstick, my trusty spreadsheet compared new 2025 estimates for nations, released by the International Monetary Fund on Tuesday, Oct. 14, to state-level readings for the second quarter of 2025 from the Bureau of Economic Analysis, released in September.
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%. So roughly $300 billion – a 7% gap – separates these three nations and California on this vanity scorecard.
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.
The IMF update showed that the world’s top three economies remained the same. The U.S. was No. 1 with an estimated output of $30.6 trillion for all of 2025, up 4.5% from the previous year. Then comes China at $19.4 trillion, up 3.5% in a year, and Germany at $5 trillion, up 7% in a year.
By the way, the IMF estimates that the world economy will generate $117 trillion in business output in 2025, up 5.4% from 2024.
The IMF outlook for the world’s economy was guarded: “Risks are tilted to the downside. Prolonged uncertainty, more protectionism, and labor supply shocks could reduce growth. Fiscal vulnerabilities, potential financial market corrections, and erosion of institutions could threaten stability.”
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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Californians spend $8,640 more than other Americans. Where did it go? California consumer confidence slips to 3-month low California remains world’s fourth-largest economy Southern California job creation runs 52% below normal 39 reasons to cheer California’s economyHence then, the article about california falls to world s fifth largest economy was published today ( ) and is available on Los Angeles Daily News ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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