California has regained its bragging-rights ranking as the world’s fourth-largest economy.
Using gross domestic product as the scorecard, my trusty spreadsheet compared fresh state-level data for the third quarter of 2025 from the Bureau of Economic Analysis with 2025 business output estimates for countries compiled by the International Monetary Fund, released in October.
In the third quarter, California’s economy produced goods and services at a nation-leading annual rate of $4.296 trillion – a 4.5% increase from the previous year, according to the BEA. That was up from the second quarter’s $4.215 trillion rate.
Only the U.S. ($31 trillion), China ($19 trillion), and Germany ($5 trillion) had larger business output last year, according to the latest tallies.
California’s revised GDP pace pushed it ahead of Japan’s $4.28 trillion economy – but by just $16 billion. Japan had previously reclaimed the world’s No. 4 spot, surpassing California, according to the IMF’s October update of GDP results.
GDP is a broad measure of the production of goods and services, often treated as a sign of economic health and a yardstick for comparing economies.
This somewhat complicated economic number has become political buzz in the state. California’s business stature appears lofty when its output is compared to other nations through the lens of GDP, measured in U.S. dollars.
But currency is a wildcard in the ranking math. The American dollar has been weak for the past year, which may help California’s global “rivals” on this scorecard when the IMF’s next update comes out in April.
It’s a tight race for the world’s No. 4 economy. According to IMF data, just behind Japan and California is India, with an economy worth $4.125 trillion in 2025. Then there’s the United Kingdom at $3.96 trillion.
So, roughly $300 billion – a 7% gap – separates these three countries from California on this vanity scoreboard. It’s likely that India’s fast-growing economy, powered by the world’s No. 1 population, will soon take over the No. 4 ranking.
California reached the No. 5 global ranking in 2017 and moved up to No. 4 in 2024 after a long downturn in the Japanese economy.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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