Iterate over files in directory and parse in a Terraform module

locals.tf

locals {
  base_path  = "${path.module}/files"
  yaml_files = fileset(local.base_path, "**.yml")
  contents   = zipmap(
                [for file_path in local.yaml_files : trimsuffix(basename(file_path), ".yml")],
                [for file_path in local.yaml_files : yamldecode(file("${local.base_path}/${file_path}"))]
               )
}

output.tf

output "contents" {
  value = local.contents
}