In this article, we will be looking at 12 countries that offer the highest bond yields in the world.
High bond yields hold the attention of investors in the global financing environment as both an opportunity and a cautionary tale. Double-digit returns are needed to attract any investor. However, they are often accompanied by issues reflecting economic challenges, such as inflationary pressures and geopolitical instability. In this article, we will be examining 12 countries that offer the highest bond yields as of 5th Apr 2024. Through the article, we also want to shed some light on the complicated relationship between risk and reward, which defines this segment of the fixed-income market.
The current macroeconomic environment sets the stage for our exploration. Central banks worldwide struggle with rising inflation, even after three years of aggressive monetary tightening. Earlier this week, the new tariffs announced by President Trump worsened the existing condition by igniting a tariff war between countries. Investors increasingly divert capital to sovereign debt in emerging markets, where yields could often exceed 15%. This elevated return, in addition to indicating the compensation for risk, also reflects the fiscal and monetary dilemmas that nations are confronting. They remind us that high yields more often correlate with economic distress.
So, why prioritize bonds instead of investing in equity markets? Diversification alongside risk management helps in answering this question. The equity market, at present, faces hurdles from the new tariff rates and the subsequent trade war. The U.S. market, in particular, is experiencing a decline similar to that of the COVID-19 pandemic. Historically, high-yield sovereign bonds have often outperformed many risky assets. But such a benefit is not without its risks. For instance, in the case of Turkey, though the 10-year lira bonds offered a higher yield, the company’s currency has depreciated against the U.S. dollar since 2023. The dilemma highlights the importance of evaluating nominal returns and currency risk in a sovereign debt assessment.
Various drivers must be taken into account when scrutinizing the elevated yields. For instance, inflation could be a predominant factor. In some countries, like Pakistan, central banks have raised the benchmark rates to historic levels to stabilize currencies. This is required when a country aims to attract foreign capital. On the other hand, some countries like Sri Lanka are still recovering from recent sovereign defaults. Hence, they face heightened borrowing costs while investors demand a more significant risk premium. Even countries with a relatively stable economy, like Egypt, often face structural vulnerabilities like mounting external debt, though offering a yield of 15% or above.
An understanding of the underlying issues is necessary for investors to make informed decisions. In our article, we examine the 12 countries that may interest investors looking to add bonds with high yields to their portfolios.
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With any delay, let’s count down from 12 to 1, the top countries with the highest bond yields in the world. Our top 5 may blow your mind.
Our Methodology
This article will look at 12 countries that offer the highest bond yields in the world as of 5th Apr 2025. The 10-year bond yield is considered for the analysis, and the countries are listed from the lowest to the highest in terms of the yield. The data for the article is gathered from the website Worldgovernmentbonds.com.
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12. Bangladesh
S&P Rating: B+
10-Year bond yield as of 5th Apr 2025: 12.06%
Bangladesh’s interest rates are at 12% after a set of measures taken by the Bangladesh Bank, the central authority of Bangladesh, to curb its very high inflation rates. Bangladesh’s last twelve-month average inflation is at 10.3%, indicating a declining purchasing power for its citizens. The S&P rating of B+ indicates that there are many more risks that investors should be wary of.
11. Ukraine
S&P Rating: SD
10-Year bond yield as of 5th Apr 2025: 12.58%
Ukraine’s inflation accelerated to 13.4% in February 2025. However, the National Bank of Ukraine aims to reduce the inflation by half before the middle of the year with the combined efforts. In March 2025, Ukraine raised its interest rate by 100 basis points for the third time in a row, which led to an interest rate of 15.5%. The public debt of 106.6% of the GDP in 2025 can also be a concerning issue that Ukraine must solve in the upcoming years. The yield curve is inverted, but financially, Ukraine is in a much better position than Russia, which has been in a war since 2022.
10. Pakistan
S&P Rating: CCC+
10-Year bond yield as of 5th Apr 2025: 12.63%
Pakistan’s inflation for March 2025 was at 0.7, the lowest in the past 6 decades. The State Bank of Pakistan (SBP) also stopped cutting the interest rate following the declining inflation at 12% in March, as the previous rate cuts managed to reduce the overall inflation. The S&P Rating of CCC+ is among the worst on the list, primarily due to its 67.5% debt-to-GDP ratio, which is beyond the legal limit. Agricultural exports have been on the rise over the past few years. However, the weaker Pakistani rupee and its $7 billion bailout from the IMF could be a concerning factor for investors.
9. Kenya
S&P Rating: B-
10-Year bond yield as of 5th Apr 2025: 13.52%
Kenya’s government bonds provide a substantially high 13.5% yield due to a high debt-to-GDP ratio of 67%. In February 2025, Kenya’s inflation was recorded at a low of 3.5%. Kenya also recently reduced the benchmark interest rate by 50 basis points to 10.75%, which is the fourth consecutive rate cut, indicating that the economy is stabilizing. The government is trying to boost economic growth. While the S&P rating of B- shows that the investors may face a high risk, with a Normal yield curve and low inflation rates, Kenya presents an interesting investment opportunity for investors.
8. Brazil
S&P Rating: BB
10-Year bond yield as of 5th Apr 2025: 14.67%
Like Kazakhstan, Brazil’s central bank increased the benchmark interest rate to 13.25% in March 2025 to counter the increasing inflation since the start of 2025. However, there are some important factors that the investors must consider, such as a debt-to-GDP ratio of 76.1% and a weaker currency that is further fueling the import prices. The current yield of Brazil is at 14.67%, with a flatter yield curve.
7. Kazakhstan
S&P Rating: BBB-
10-Year bond yield as of 5th Apr 2025: 15.00%
The National Bank of Kazakhstan increased the interest rate to 16.5% in March 2025 to curb the increasing inflation, which has been growing at an alarming rate since 2025. Despite the inflation issues, the public debt-to-GDP ratio has been stable at around 20% over the past decade. The ‘BB-‘ with a stable outlook indicates a moderate level of risk for the investors. However, the depreciating currency levels should also concern foreign investors.
6. Russia
S&P Rating: NR
10-Year bond yield as of 5th Apr 2025: 15.55%
Russia, amid a war with Ukraine, provides one of the highest bond yields in the world. The yield curve of Russia is highly inverted, indicating a very high implied probability of default. Russia’s inflation rate is soaring at 10.1%, despite the central bank raising the interest rate to 21% in 2024, the highest in the last two decades. The central bank decided to maintain the interest rates to combat inflation, but to no avail. The weaker ruble further fuels the economic crisis going on in Russia.
