The Brief

LOS ANGELES - California has dropped to the world's fifth-largest economy, slipping from its previous spot at number four.

What we know:

California's economy was producing goods and services at an annual rate of $4.215 trillion in the second quarter of 2025, according to the Bureau of Economic Analysis.

This represented a 5% increase in a year. However, new estimates from the International Monetary Fund show that Japan's economy is now at $4.28 trillion, a 6.5% increase in a year, allowing it to reclaim the number four position.

The IMF's updated stats also show other major economies: India at $4.125 trillion and the United Kingdom at $3.96 trillion. This creates a gap of about $300 billion between these three nations and California.

The backstory:

California firs

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