The “Looking Glass” ponders economic and real estate trends through two distinct lenses: the optimist’s “glass half-full” and the pessimist’s “glass half-empty.”
Buzz: California easily remains the nation’s largest economy – but can it stay as the world’s fifth-biggest?
Source: My trusty spreadsheet compared new stats from the US Bureau of Economic Analysis and the International Monetary Fund on gross domestic product, a broad measure of business output used to compare the size of economies.
Debate: Will India surpass California on the theoretical GDP scorecard, looking at the state as an international economic force?
Glass half-full
California’s GDP grew at a 1.2% annual rate in 2024’s first quarter. That pushed the value of the state’s business output at $3.99 trillion a year.
So, just how big is that?
It’s 50% larger than Texas and its $2.66 trillion in GDP.
Only three other states are in the trillion-dollar club: New York at $2.23 trillion, Florida at $1.65 trillion, and Illinois at $1.11 trillion. Pennsylvania should join soon, as it’s only $1.6 billion short!
Or consider this: California’s output is larger than the nation’s 25 smallest state economies. Yes, half of the US.
Glass half-empty
But what about the Golden State’s bragging rights as the world’s fifth-largest economy, as measured by GDP?
It’s a spot California has held since 2017 behind the US, China, Germany and Japan. But it now appears likely that No. 6 India will soon top California on the GDP charts.
This year, India’s economy is projected by the IMF to grow 7% to $4.06 trillion.
California’s economy – if it can keep pace with the US economy, and it did not to start 2024 – would grow by 2.6%. That would value the Golden State economy at $4.05 trillion.
So for now, 2024 is a “too close to call” situation.
But in 2025, if the IMF’s crystal ball is correct, Indian will move up a notch.
Next year, India’s economy is projected to grow by 6.5% to $4.33 trillion.
California, if it can match the forecasted 1.9% US growth, would produce $4.12 trillion of output.
Bottom line
India has 1.44 billion residents – nearly 40 times California’s 39 million. So there’s little shame in becoming the world’s sixth-largest economy.
Or look at this over-hyped contest this way: India’s GDP equals $2,600 per person. Californians, by the same math, produce $101,000 per resident.
Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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