California’s economy passes UK’s to become world’s fifth biggest

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Aided by tech, entertainment and agriculture, states GDP rose between 2016 and 2017, while UKs has fallen since 2014

Californias economy has surpassed that of the United Kingdom to become the worlds fifth largest, according to new federal data made public on Friday.

Despite having a population of only 40 million compared with the UKs 65 million people, Californias gross domestic product of $2.7tn has overtaken the UKs $2.6tn.

The so-called Golden States GDP rose by $127bn in the period from 2016 to 2017, while the UKs economic output fell slightly over that time when measured in US dollars, due in part to exchange rate fluctuations. British GDP has fallen steadily from $3tn in 2014, according to World Bank figures.

The release of Fridays data demonstrated the sheer immensity of Californias economy, home to a thriving technology sector in Silicon Valley, the worlds entertainment capital in Hollywood and Americas salad bowl in its agricultural heartland. It also reflects a substantial turnaround since the recession that followed the financial crisis of 2008.

Californias economic output is now surpassed only by the total GDP of the United States, China, Japan and Germany.

All economic sectors except agriculture contributed to Californias higher GDP, said Irena Asmundson, chief economist at the California department of finance. Financial services and real estate led the way, with $26bn in growth, followed by the information sector, which includes many technology companies, at $20bn. Manufacturing was up $10bn.

California last had the worlds fifth largest economy in 2002 but fell as low as 10th in 2012 following the great recession. Since then, the largest US state has added 2 million jobs and grown its GDP by $700bn, now contributing a little over 14% of the US economy despite having 12% of the US population, according to state economists.

Californias strong economic performance relative to other industrialized economies is driven by worker productivity, said Lee Ohanian, an economics professor at University of California, Los Angeles.

Read more: https://www.theguardian.com/us-news/2018/may/04/california-economy-uk-fifth-largest

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