Istanbul's inflation runs 3.5 points above Turkey's. If you are budgeting a project here, that gap is the number that matters.

July's data contains two different numbers. National annual consumer inflation is 31.75%. Istanbul's is 35.20%.

That gap is roughly 3.5 percentage points, and it repeats. If an Istanbul project is budgeted against the national rate — which is the usual practice — the under-costing starts on the day the contract is signed and compounds from there.

Cost pressure, not demand pressure

Consumer inflation has fallen year on year. Producer inflation has risen, from 24.2% to 27.8%. Input costs are climbing faster than sale prices, which squeezes contractor margins rather than buyer prices. Long-dated fixed-price contracts are where that pressure lands hardest.

Energy is the nearest threat

Electricity, gas and steam rose 9.65% in a single month; energy overall 4.83%. The cause is disruption at the Strait of Hormuz and regional risk, so it is unlikely to be temporary. Reviewing energy escalation clauses on projects already under way is worth doing now rather than at the next invoice.

What it means if you are buying

Construction materials rose only 1.29% month-on-month at wholesale — below the general index at 1.55%. Housing in the consumer index rose 2.25%. That spread, cheaper inputs against dearer output, currently favours the builder, though energy costs are eating into part of it.

One more signal: non-metallic minerals — cement, glass, ceramics — reached 50.3 on the PMI and crossed the expansion threshold for the first time. That indicator typically moves before construction demand itself does.

And a structural note worth holding on to: the IMF assesses the lira as 12.1% overvalued, with reserve adequacy at 78.7%, below the recommended range. For a buyer paying in foreign currency against lira-denominated costs, that risk currently runs in their favour. For anyone with foreign-currency obligations and lira income, hedging is cheaper today than it will be later.