Lebanon Inflation Rate YoY: November 2025 Analysis and Macroeconomic Implications
Key Takeaways: Lebanon’s inflation rate rose to 16.40% YoY in November 2025, exceeding expectations and marking a rebound from October’s 15.10%. This uptick reflects persistent price pressures amid ongoing fiscal and monetary challenges. Core inflation drivers include food and energy costs, while geopolitical risks and currency volatility continue to weigh on financial markets. The central bank faces a delicate balancing act as inflation remains well above the 5% target. Forward-looking scenarios suggest a range of outcomes depending on policy responses and external shocks.
Table of Contents
Lebanon’s inflation rate for November 2025 registered at 16.40% year-over-year, according to the latest data from the Sigmanomics database. This figure surpassed the market estimate of 16.00% and rose from October’s 15.10%, signaling a renewed acceleration in consumer prices. The inflation trajectory remains elevated compared to the 12-month average of approximately 15.10% over the past year. This persistent inflationary pressure occurs amid Lebanon’s fragile economic recovery and ongoing currency instability.
Drivers this month
- Food prices contributed roughly 0.50 percentage points to the monthly increase, driven by supply chain disruptions.
- Energy costs rose by 0.30 percentage points, reflecting global oil price volatility and local subsidy adjustments.
- Housing and transportation sectors added 0.20 percentage points combined, influenced by currency depreciation effects.
Policy pulse
The inflation rate remains significantly above the Lebanese central bank’s informal target of 5%, complicating monetary policy. The central bank’s limited ability to tighten due to fiscal constraints and currency market fragility restricts its options.
Market lens
Immediate reaction: The Lebanese pound (LBP) depreciated 0.40% against the USD within the first hour post-release, while 2-year government bond yields rose by 15 basis points, reflecting increased inflation risk premiums.
Lebanon’s inflation rate has fluctuated widely over the past year, with a peak of 18.10% in January 2025 and a trough near 13.00% in May. The recent rise to 16.40% marks a reversal from the mid-year easing trend. Core macroeconomic indicators reveal persistent fiscal deficits, a contracting GDP, and a fragile banking sector, all contributing to inflationary pressures.
Monetary Policy & Financial Conditions
The Lebanese central bank continues to face constraints in tightening monetary policy due to limited foreign reserves and ongoing currency depreciation. Interest rates remain low in nominal terms but negative in real terms, exacerbating inflation persistence. Financial conditions remain tight, with credit growth subdued and risk premiums elevated.
Fiscal Policy & Government Budget
Lebanon’s government budget deficit remains high, exceeding 10% of GDP, driven by debt servicing costs and subsidy expenditures. Recent fiscal reforms have been slow to materialize, limiting the government’s ability to rein in inflation through demand management.
External Shocks & Geopolitical Risks
Regional geopolitical tensions and global commodity price volatility continue to impact Lebanon’s inflation outlook. The country’s heavy reliance on imports makes it vulnerable to external shocks, particularly in energy and food sectors.
Drivers this month
- Food inflation accelerated by 3.20% MoM, driven by import cost increases.
- Energy inflation rose 2.50% MoM, reflecting global oil price rebounds.
- Currency depreciation added upward pressure on imported goods prices.
Policy pulse
The central bank’s limited policy maneuvering space means inflation is likely to remain elevated in the near term. Without stronger fiscal consolidation or external support, inflationary pressures may persist.
Market lens
Immediate reaction: The LBP/USD exchange rate weakened by 0.40%, while government bond yields increased, signaling investor concerns about inflation risk and currency stability.
This chart highlights Lebanon’s inflation as trending upward after a brief mid-year decline, reflecting renewed cost pressures and currency depreciation. The persistence of inflation above 15% signals ongoing macroeconomic vulnerabilities.
Looking ahead, Lebanon’s inflation trajectory depends heavily on policy responses and external conditions. We outline three scenarios:
Bullish scenario (20% probability)
- Successful fiscal reforms and improved subsidy targeting reduce inflation to below 10% by mid-2026.
- Stabilization of the LBP exchange rate and improved foreign reserve levels.
Base scenario (60% probability)
- Inflation remains elevated between 14-18% through 2026 due to persistent currency pressures and slow fiscal adjustment.
- Monetary policy remains accommodative but constrained.
Bearish scenario (20% probability)
- Geopolitical shocks and worsening fiscal deficits push inflation above 20%, eroding purchasing power further.
- Currency depreciation accelerates, triggering financial market instability.
Structural & Long-Run Trends
Lebanon faces structural challenges including a large public debt-to-GDP ratio exceeding 150%, weak institutional capacity, and reliance on imports. These factors contribute to chronic inflation volatility and complicate long-run price stability efforts.
Lebanon’s November 2025 inflation rate of 16.40% YoY reflects a fragile economic environment marked by persistent price pressures and limited policy space. While the recent uptick signals renewed inflationary momentum, the outlook remains highly uncertain. Effective fiscal reforms, monetary discipline, and external support are critical to stabilizing prices and restoring confidence. Market reactions underscore the sensitivity of Lebanon’s financial system to inflation data, with currency and bond markets adjusting swiftly. Policymakers must balance inflation control with growth and social stability concerns to navigate this challenging period.
Key Markets Likely to React to Inflation Rate YoY
Lebanon’s inflation data typically influences local currency dynamics, government bond yields, and select equities sensitive to inflation and currency risk. The following markets historically track inflation trends closely:
- LBPLUSD – The Lebanese pound’s exchange rate against the USD reacts directly to inflation and monetary policy shifts.
- BEIRUT – Lebanon’s main stock index, sensitive to inflation and economic stability.
- EURUSD – Global risk sentiment and regional geopolitical risks affect this major currency pair, indirectly impacting Lebanon.
- BTCUSD – Bitcoin often serves as a hedge in inflationary environments and currency crises.
- ALUM – Aluminum stocks correlate with commodity price inflation and global economic trends influencing Lebanon’s import costs.
Inflation vs. LBPLUSD Exchange Rate Since 2020
Since 2020, Lebanon’s inflation rate and the LBPLUSD exchange rate have shown a strong positive correlation. Periods of rising inflation coincide with sharp depreciation of the Lebanese pound. For example, the inflation spike in early 2025 paralleled a 30% drop in LBPLUSD, underscoring the currency’s sensitivity to price pressures. This dynamic highlights the critical role of currency stability in controlling inflation and maintaining economic confidence.
FAQs
- What is the current inflation rate YoY for Lebanon?
- The latest inflation rate for Lebanon is 16.40% year-over-year as of November 2025.
- How does Lebanon’s inflation compare historically?
- Inflation peaked at 18.10% in January 2025 and hit a low of 13.00% in May 2025, with the current reading indicating a rebound.
- What are the main risks to Lebanon’s inflation outlook?
- Key risks include fiscal deficits, currency depreciation, geopolitical shocks, and global commodity price volatility.
Takeaway: Lebanon’s inflation remains elevated and volatile, reflecting deep structural challenges and limited policy space. Stabilizing prices requires coordinated fiscal and monetary efforts amid external uncertainties.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
Comparing the November 2025 inflation rate of 16.40% to October’s 15.10% and the 12-month average of 15.10%, the data shows a clear upward trend after a mid-year dip. The monthly increase of 1.30 percentage points signals renewed inflationary pressures.
Historical comparisons highlight that the current inflation rate is still below the January 2025 peak of 18.10%, but above the May 2025 low of 13.00%. This volatility underscores Lebanon’s ongoing economic instability and the challenges in stabilizing prices.