(CN) – California surpassed the United Kingdom to become the fifth largest economy in the world in 2017 with a gross domestic product of $2.7 trillion, according to new federal data released Friday.
California’s jump to fifth place in the world ranking represents an increase of more than $100 billion from 2016. The Golden State now ranks above the economies of United Kingdom, India, France, Brazil, Italy and Canada, according to the California Department of Finance.
Much of the credit goes to California’s robust environment, population diversity and range of climates that promote a strong agriculture industry according to Kadee Russ, associate professor of economics at the University of California, Davis.
“California has done a good job of growing its university system that promotes innovation, but also provides technology to other industries, for example the agriculture sector,” said Russ.
The state’s agriculture industry saw crop receipts of over $46 billion in 2016 – the most recent figures available – and at least $100 billion for the economy in activity associated with farming, according to the California Department of Food and Agriculture.
What can’t be ignored is California sits on the epicenter of the high-tech boom said William Yu, economist at UCLA Anderson School of Management.
“It’s easy to say they’ve done well,” said Yu. “For example, Apple’s operating profit margins last reported were $88 billion. That’s not all $88 billion that was produced in California, but a majority of that was here. That’s one tech company who contributes to the state's GDP. And that's not to mention Facebook, Google are here as well.”
California's economy was ranked fifth in the world in 2002, but slipped to the 10th spot by the end of the Great Recession.
Fortunately, the state is bouncing back, Yu said, and both rural and coastal regions are catching up to their pre-recession status in terms of real estate activity. That also contributes to the state’s economic engine.
The state’s Department of Finance ranked California based on data from the International Monetary Fund, World Economic Outlook Database.
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