Take That, France--We’re No. 5
Sacre bleu!
A weak euro coupled with a healthy Southern California economy helped propel the Golden State past France to rank as the world’s fifth-largest economy if it were a separate nation, according to a report released this week.
Figures from the Los Angeles County Economic Development Corp. placed the 2000 gross state product at $1.33 trillion, just ahead of France at $1.28 trillion, and behind the United Kingdom at $1.42 trillion.
In 1999, France ranked No. 4, with a gross domestic product of $1.43 trillion and the United Kingdom was fifth with $1.42 trillion. California would have filled the No. 6 spot at $1.18 trillion.
Local and state economists said the main reason for California’s leap forward for 2000 was currency fluctuations that increased the value of the U.S. dollar versus currencies in Europe and Asia.
“The dollar appreciated quite a bit against the euro and the pound sterling,” said Ted Gibson, chief economist for the California Department of Finance. “Both the U.K. and France had growth--2.5% and 3%--in their native currency, but their GDP fell in terms of the exchange rate with the dollar.”
In addition, Jack Kyser, chief economist for the LAEDC, pointed out that “Southern California had a spectacularly good year last year.”
The state Finance Department has yet to release its ranking, but Gibson agreed with the LAEDC ordering, noting that state estimates put the California GDP at $1.38 trillion. Kyser said his agency uses a slightly different method to calculate GPD than the state uses.
The LAEDC’s figure for the California GDP was based on 2000 personal income and employment data, Kyser said. The figures for the world economies--from the United States at No. 1 to Turkey at No. 22--were based on information from the Paris-based Organisation for Economic Co-Operation and Development, using this week’s exchange rates. Japan ranks No. 2 and Germany is No. 3.
Kyser acknowledged that reports using data from the World Bank, or using exchange rates from a different time period, might produce different results.
But he said the rankings have value, beyond just bragging rights, because they help demonstrate just how big the California economy is and how quickly it’s growing.
In addition, he noted that, based on his figures, the Los Angeles County economy would rank as No. 16, if it were a separate nation, with a gross product of $352 billion.
“There are so many people who think there’s nothing in L.A. County [beyond] entertainment,” said Kyser, noting that movie production accounted for about $31 billion. “There’s a whole lot more going on in Los Angeles County than movie production.”
Whether the constant economic jockeying will produce changes for the 2001 ranking of nations is still unclear. California must contend not only with a slowing U.S. economy, but with its continuing energy crisis.
