Turkey's service producer prices rise 38.37% annually in May

The Turkish Statistical Institute (TurkStat) released the Service Producer Price Index (S-PPI) data for May. According to the data, producer prices in the service sector increased by 38.37% year-on-year. On a monthly basis, the index rose by 5.23%. These figures indicate that cost increases in the service sector continue. Particularly, sub-sectors such as transportation and storage, accommodation and food services have seen notable price hikes.

The S-PPI recorded a 24.34% increase compared to December of the previous year, a 38.37% increase compared to the same month of the previous year, and a 35.52% increase based on twelve-month averages. These rates show that service inflation continues to put pressure on overall inflation. It is assessed that increases in energy and raw material costs are being reflected in service prices.

On a sectoral basis, the highest annual increase was in professional, scientific and technical services at 42.60%. This was followed by transportation and storage services at 41.27%, and information and communication services at 38.63%. Accommodation and food services saw an annual increase of 31.97%, real estate services 32.85%, and administrative and support services 36.18%.

On a monthly basis, the highest increase was in real estate services at 8.28%. Information and communication services rose by 7.80%, professional, scientific and technical services by 7.58%, and administrative and support services by 6.73%. Transportation and storage services increased by 3.38% monthly, while accommodation and food services rose by 4.27%.

Economists note that the S-PPI data points to continued cost-driven price increases in the service sector. While the central bank's tight monetary policy to combat inflation is closely monitored, the stickiness of service inflation draws attention. In the coming period, demand conditions and exchange rate movements are expected to be decisive on service prices.