Economy Larger Than Russia’s…Smaller Than Brazil’s. California’s gross domestic product (GDP)—the value of goods and services produced here—totaled $2.2 trillion in 2013. World Bank data indicate that California’s economy is slightly smaller than that of Brazil (the world’s seventh-largest national economy), but bigger than Russia’s. California's economy is larger than some of the Group of Eight (G8) industrial economies, such as Canada and Italy.
Economy Centered in Los Angeles Basin and Bay Area. With 34 percent of California’s population, the Los Angeles/Orange County region produces 36 percent of California’s economic output. With only 17 percent of the population, the Bay Area produces 25 percent of the state’s output. The technology sector’s large presence in the Bay Area economy increases the per-person value of its output.
International GDP Comparisons from Other Sources. There are several methods by which international GDP comparisons can be constructed. The international estimates in the graphic above are based on the World Bank’s estimates, which convert GDP in countries’ home currencies to dollars based on exchange rates that prevailed in a given year. As such, changes in currency exchange rates can affect these rankings noticeably from year to year. The U.S. Central Intelligence Agency (CIA) and the International Monetary Fund (IMF) are among those that rank national GDPs using methods similar to, but a bit different from, those of the World Bank. In 2013, based on CIA and IMF data, California’s economy would rank about seventh or eighth in the world.
Alternative GDP Comparisons. An alternative international GDP comparison uses purchasing power parity (PPP) instead of exchange rates to attempt to adjust for differences in living costs across countries. Using PPP, California’s economy—adjusted for cost of living—would rank eleventh in the world, according to World Bank data. Using the PPP measure, China’s economy is nearly as large as that of the entire U.S. Both India and Indonesia’s economies are larger than California’s by this measure due to their lower costs of living. (Wikipedia has useful entries that list various international GDP rankings, including PPP rankings.)
44 Percent Bigger Economy Than That of Texas. California has 45 percent more people than Texas—the next-largest state economy—and California’s GDP is proportionately bigger as a result. Specifically, Texas’ GDP totaled $1.5 trillion in 2013. If California and Texas were considered separate from the rest of the U.S., Texas’s economy would rank as the world’s fourteenth-largest—six spots below California and just below Australia’s ranking. Since 1997, the GDPs of both California and Texas have grown faster than the nation as a whole, but the average annual growth rate of Texas’ GDP and population surpassed California’s during that period. A significant reason for the faster growth rate of Texas’ economic output has been an increase in oil and gas extraction. Oil extraction there more than doubled between 2010 and 2013.