The economy of Kerala is the 11th largest in India, with an annual gross state product (GSP) of ₹13.11 lakh crore (US$157.45 billion) in 2024–2025. Per-capita GSP of Kerala during the same period is ₹372,783 (US$4,400), the sixth largest in India. In 2019–20, the tertiary sector contributed around 63% of the state's GSVA, compared to 28% by secondary sector, and 8% by primary sector.
Kerala's high GDP and productivity figures with higher development figures is often dubbed the "Kerala Phenomenon" or the "Kerala Model" of development by economists, political scientists, and sociologists. This phenomenon arises mainly from Kerala's land reforms, social upliftment of entire communities initiated from the first democratic government of Kerala led by E. M. S. Namboodiripad and subsequently implemented by various governments ruled the state. Kerala's economy is based on a social democratic welfare state. Some, such as Financial Express, use the term "Money Order Economy". Kerala is the second-most urbanised major state in the country with 47.7% urban population according to the 2011 Census of India, and has tried to maintain a pan-state economy rather than concentrating in some selected cities to develop. Kerala is the second-least impoverished state in India according to the Annual Report of Reserve Bank of India published in 2013, only behind Goa.