California has world’s 8th largest economy, beating Russia, Italy

By Dale Kasler

Published: Monday, Jul. 7, 2014 - 11:37 am

California’s economy has overtaken Russia and Italy, with the state now ranked as the world’s eighth largest economy.

The state’s $2.203 trillion gross domestic product in 2013 put California slightly ahead of Russia and Iraly and just behind the No. 7 economy, Brazil. The rankings were calculated by the Center for Continuing Study of theCalifornia Economy in Palo Alto and based on annual statistics from the World Bank.

Because of slow growth in Europe, California could close in on No. 5 France and No. 6 United Kingdom in the 2014 rankings, said economistStephen Levy, director of the Palo Alto center.

Levy said the fluctuations in the annual rankings shouldn’t be taken too seriously but the latest results do offer additional evidence that California is hitting its stride after years of economic turmoil.

California’s economy grew by 2 percent last year, compared to the U.S. average of 1.8 percent.

“It’s part of the California comeback story, California beginning to grow again,” Levy said Monday.

More than a decade ago, California was No. 5 among the world’s economies but gradually slipped as growth accelerated in other parts of the world and the state took more than its share of lumps during the recession. The 2012 rankings put California at No. 10, slightly behind Russia and Italy.

California’s 2013 results were boosted in part by a revision in how state gross domestic products are calculated. For the first time, business spending on intellectual property, including entertainment, was included in the statistics. As a result, California’s economic output now includes the huge sums spent on making software, movies and so on.

“We have Hollywood, we have Silicon Valley,” said Irena Asmundson, chief economist at the state Department of Finance. “This number does reflect the strength of the California economy a little better.”

Even without the revision, Levy said, California would have passed Italy and Russia in economic output.

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.