Turkey’s Service Producer Price Index Rises 36.3% Annually in July 2025

The Turkish Statistical Institute (TÜİK) announced that the Service Producer Price Index (H-ÜFE) rose sharply in July 2025, continuing to highlight inflationary pressures in the services sector.

According to official data, the index increased:

• 3.21% compared to the previous month

• 31.23% since December 2024

• 36.35% year-on-year compared to July 2024

• 43.78% based on twelve-month averages

These figures indicate that, while the pace of service inflation has slowed from the peaks of 2023 and 2024, cost pressures remain elevated across multiple industries.

Comparing July 2023 – July 2025: A Sharp Decline in Inflation Pace

The July 2025 results mark a notable shift compared to previous years:

This comparison shows a dramatic deceleration. For example, in July 2023, service producer prices were soaring at nearly 80% annually, while in July 2025 the pace has moderated to 36.35%.

Economists interpret this slowdown as a sign that inflationary momentum is weakening, yet the figures remain well above comfort levels for businesses and consumers alike.

Sectoral Breakdown: Annual Changes

Service producer price inflation varied significantly across sectors, with real estate and communication services among the hardest hit.

Compared to July 2024, prices increased by:

• 31.89% in transportation and storage services

• 37.41% in accommodation and food services

• 41.00% in information and communication services

• 48.65% in real estate services

• 36.11% in professional, scientific, and technical services

• 41.68% in administrative and support services

Among these, real estate services recorded the sharpest annual rise, highlighting the ongoing cost surge in Turkey’s housing and rental markets.

Sectoral Breakdown: Monthly Changes

On a monthly basis, service producer prices showed more moderate but still uneven growth across sectors:

• +2.97% in transportation and storage

• +5.20% in accommodation and food services

• +0.26% in information and communication services

• +10.91% in real estate services

• -0.17% in professional, scientific, and technical services (the only sector showing a decline)

• +3.50% in administrative and support services

The standout figure is the 10.91% surge in real estate services in a single month, further intensifying concerns over rising housing-related costs.

Implications for the Turkish Economy

The July 2025 H-ÜFE data reflects a dual reality: inflationary pressures in services have slowed considerably compared to 2023–2024, but remain high enough to impact household budgets and business costs.

For consumers, higher costs in housing, dining, and transportation translate into more expensive living standards. For businesses, rising administrative and support service costs add to operational challenges, particularly for small and medium-sized enterprises.

Economist Elif Arslan noted:

“The moderation in service inflation is a positive sign, but double-digit increases in housing and accommodation costs show that affordability remains a serious issue. These pressures can weigh on both household consumption and corporate investment.”

Services Inflation and Broader Inflation Trends

The service sector is a critical component of Turkey’s broader inflation outlook. Since services tend to have stickier price dynamics than goods, high H-ÜFE levels suggest that inflationary pressures may persist even if commodity-driven inflation cools.

Moreover, the combination of:

• Housing demand and rental market pressures

• High tourism-related service costs

• Persistent wage growth

all contribute to keeping service inflation elevated.

The Service Producer Price Index (H-ÜFE) in Turkey increased by 36.35% year-on-year in July 2025, marking a significant slowdown from the inflation spikes of previous years. Yet the data highlights continued stress in key sectors such as real estate, accommodation, and food services.

With twelve-month average growth at 43.78%, Turkey’s service sector inflation continues to challenge policymakers, businesses, and households alike. While the pace of price increases has cooled, sustained high levels of cost growth signal that structural inflationary pressures remain deeply embedded in the economy.