California is the world’s fifth largest economy, overtaking the UK
The state of California is the fifth largest economy in the world, overtaking the UK, according to new federal data.
California, with a population of just 40 million, now has a gross state product (GSP) of $2.7 trillion, surpassing the UK’s gross domestic product (GDP) of $2.6 trillion. The UK, in comparison, has a population of 65.5 million.
California’s GSP increased by $127 billion in the period from 2016 to 2017. Over the same period the UK’s economic output, measured in US dollars, dropped slightly.
If the state was its own independent country it would have the fifth largest economy in the world, behind only the USA, China, Japan and Germany.
The sheer size of California’s economy is attributed to its thriving tech sector, being home to Hollywood, the entertainment capital of the world, and North America’s “salad bowl” in the Central Valley agricultural heartland.
The state had the world’s fifth largest economy in 2002, however, it dropped to as low as 10th in 2012 after the great recession. California has since added 2 million jobs while its GSP has grown by $700bn, contributing 14% of the US economy.
Irena Asmundson, chief economist at the California Department of Finance, said that all economic sectors apart from agriculture contributed to the increase in GSP.
Growth was led by financial services, real estate and the information sector, which includes technology companies.
Texas was the US’s next highest-producing state with a gross state product of $1.696 trillion (putting it in the 11th spot worldwide), followed by New York, Florida and Illinois.