California overtakes UK to become world’s fifth largest economy
US state has 25 million fewer people than Britain, which has seen a drop in its economic output due partly to exchange rate fluctuations
California’s economy has surpassed that of the United Kingdom to become the world’s fifth largest, according to new federal data made public on Friday.
California’s gross domestic product rose by US$127 billion from 2016 to 2017, surpassing US$2.7 trillion, the data said. Meanwhile, the UK’s economic output fell slightly over that time when measured in US dollars, due in part to exchange rate fluctuations.
The data demonstrate the sheer immensity of California’s economy, home to nearly 40 million people, a thriving technology sector in Silicon Valley, the world’s entertainment capital in Hollywood and the nation’s salad bowl in the Central Valley agricultural heartland. It also reflects a substantial turnaround since the Great Recession.
“We have the entrepreneurial spirit in the state, and that attracts a lot of talent and money,” said Sung Won Sohn, an economics professor at California State University Channel Islands. “That is why, despite high taxes and cumbersome government regulations, more people are coming into the state to join the parade.”
All economic sectors except agriculture contributed to California’s higher GDP, said Irena Asmundson, chief economist at the California Department of Finance. Financial services and real estate led the pack at US$26 billion in growth, followed by the information sector, which includes many technology companies, at US$20 billion. Manufacturing was up US$10 billion.
