Country Long-Term Rating

Adj. Default Sp Total Risk Pre

Country Risk Premium
Albania B1 400 11.00% 6.00%
Angola Ba3 325 9.88% 4.88%
Argentina B3 600 14.00% 9.00%
Armenia Ba2 275 9.13% 4.13%
Australia Aaa 0 5.00% 0.00%
Austria [1] Aaa 0 5.00% 0.00%
Azerbaijan Ba1 240 8.60% 3.60%
Bahamas A3 115 6.73% 1.73%
Bahrain Baa1 150 7.25% 2.25%
Bangladesh Ba3 325 9.88% 4.88%
Barbados Baa3 200 8.00% 3.00%
Belarus B2 500 12.50% 7.50%
Belgium [1] Aa1 25 5.38% 0.38%
Belize B3 600 14.00% 9.00%
Bermuda Aa2 50 5.75% 0.75%
Bolivia B1 400 11.00% 6.00%
Bosnia and Herzegov B2 500 12.50% 7.50%
Botswana A2 100 6.50% 1.50%
Brazil Baa2 175 7.63% 2.63%
Bulgaria Baa3 200 8.00% 3.00%
Cambodia B2 500 12.50% 7.50%
Canada Aaa 0 5.00% 0.00%
Cayman Islands Aa3 70 6.05% 1.05%
Chile Aa3 70 6.05% 1.05%
China Aa3 70 6.05% 1.05%
Colombia Baa3 200 8.00% 3.00%
Costa Rica Baa3 200 8.00% 3.00%
Croatia Baa3 200 8.00% 3.00%
Cuba Caa1 700 15.50% 10.50%
Cyprus [1] A2 100 6.50% 1.50%
Czech Republic A1 85 6.28% 1.28%
Denmark Aaa 0 5.00% 0.00%
Dominican Republic B1 400 11.00% 6.00%
Ecuador Caa2 850 17.75% 12.75%
Egypt Ba3 325 9.88% 4.88%
El Salvador Ba2 275 9.13% 4.13%
Estonia A1 85 6.28% 1.28%
Fiji Islands B1 400 11.00% 6.00%
Finland [1] Aaa 0 5.00% 0.00%
France [1] Aaa 0 5.00% 0.00%
Georgia Ba3 325 9.88% 4.88%
Germany [1] Aaa 0 5.00% 0.00%
Greece [1] Caa1 700 15.50% 10.50%
Guatemala Ba1 240 8.60% 3.60%
Honduras B2 500 12.50% 7.50%
Hong Kong Aa1 25 5.38% 0.38%
Hungary Baa3 200 8.00% 3.00%
Iceland Baa3 200 8.00% 3.00%
India Ba1 240 8.60% 3.60%
Indonesia Ba1 240 8.60% 3.60%
Ireland [1] Ba1 240 8.60% 3.60%
Isle of Man Aaa 0 5.00% 0.00%
Israel A1 85 6.28% 1.28%
Italy [1] Aa2 50 5.75% 0.75%
Jamaica B3 600 14.00% 9.00%
Japan Aa2 50 5.75% 0.75%
Jordan Ba2 275 9.13% 4.13%
Kazakhstan Baa2 175 7.63% 2.63%
Korea A1 85 6.28% 1.28%
Kuwait Aa2 50 5.75% 0.75%
Latvia Baa3 200 8.00% 3.00%
Lebanon B1 400 11.00% 6.00%
Lithuania Baa1 150 7.25% 2.25%
Luxembourg [1] Aaa 0 5.00% 0.00%
Macao Aa3 70 6.05% 1.05%
Malaysia A3 115 6.73% 1.73%
Malta [1] A1 85 6.28% 1.28%
Mauritius Baa2 175 7.63% 2.63%
Mexico Baa1 150 7.25% 2.25%
Moldova B3 600 14.00% 9.00%
Mongolia B1 400 11.00% 6.00%
Montenegro Ba3 325 9.88% 4.88%
Morocco Ba1 240 8.60% 3.60%
Netherlands [1] Aaa 0 5.00% 0.00%
New Zealand Aaa 0 5.00% 0.00%
Nicaragua B3 600 14.00% 9.00%
Norway Aaa 0 5.00% 0.00%
Oman A1 85 6.28% 1.28%
Pakistan B3 600 14.00% 9.00%
Panama Baa3 200 8.00% 3.00%
Papua New Guinea B1 400 11.00% 6.00%
Paraguay B1 400 11.00% 6.00%
Peru Baa3 200 8.00% 3.00%
Philippines Ba2 275 9.13% 4.13%
Poland A2 100 6.50% 1.50%
Portugal [1] Ba2 275 9.13% 4.13%
Qatar Aa2 50 5.75% 0.75%
Romania Baa3 200 8.00% 3.00%
Russia Baa1 150 7.25% 2.25%
Saudi Arabia Aa3 70 6.05% 1.05%
Senegal B1 400 11.00% 6.00%
Singapore Aaa 0 5.00% 0.00%
Slovakia A1 85 6.28% 1.28%
Slovenia [1] Aa2 50 5.75% 0.75%
South Africa A3 115 6.73% 1.73%
Spain [1] Aa2 50 5.75% 0.75%
Sri Lanka B1 400 11.00% 6.00%
St. Vincent & the Gr B1 400 11.00% 6.00%
Suriname Ba3 325 9.88% 4.88%
Sweden Aaa 0 5.00% 0.00%
Switzerland Aaa 0 5.00% 0.00%
Taiwan Aa3 70 6.05% 1.05%
Thailand Baa1 150 7.25% 2.25%
Trinidad and Tobago Baa1 150 7.25% 2.25%
Tunisia Baa3 200 8.00% 3.00%
Turkey Ba2 275 9.13% 4.13%
Ukraine B2 500 12.50% 7.50%
United Arab Emirates Aa2 50 5.75% 0.75%
United Kingdom Aaa 0 5.00% 0.00%
Region
Eastern Europe & Russia
Africa
Central and South America
Eastern Europe & Russia
Australia & New Zealand
Western Europe
Eastern Europe & Russia
Caribbean
Middle East
Asia
Caribbean
Eastern Europe & Russia
Western Europe
Central and South America
Caribbean
Central and South America
Eastern Europe & Russia
Africa
Central and South America
Eastern Europe & Russia
Asia
North America
Caribbean
Central and South America
Asia
Central and South America
Central and South America
Eastern Europe & Russia
Caribbean
Western Europe
Eastern Europe & Russia
Western Europe
Caribbean
Central and South America
Africa
Central and South America
Eastern Europe & Russia
Asia
Western Europe
Western Europe
Eastern Europe & Russia
Western Europe
Western Europe
Central and South America
Central and South America
Asia
Eastern Europe & Russia
Western Europe
Asia
Asia
Western Europe
Financial Center
Middle East
Western Europe
Caribbean
Asia
Middle East
Eastern Europe & Russia
Asia
Middle East
Eastern Europe & Russia
Middle East
Eastern Europe & Russia
Financial Center
Asia
North America
Western Europe
Africa
Central and South America
Eastern Europe & Russia
Asia
Eastern Europe & Russia
Africa
Western Europe
Australia & New Zealand
Central and South America
Western Europe
Middle East
Asia
Central and South America
Asia
Central and South America
Central and South America
Asia
Eastern Europe & Russia
Western Europe
Middle East
Eastern Europe & Russia
Eastern Europe & Russia
Middle East
Middle East
Asia
Eastern Europe & Russia
Eastern Europe & Russia
Africa
Western Europe
Asia
Caribbean
Caribbean
Western Europe
Western Europe
Asia
Asia
Caribbean
Africa
Asia
Eastern Europe & Russia
Middle East
Western Europe
 Estimating Country Risk Premiums
To estimate the long term country risk premium, I start with the country rating (from Moody's: www.moodys.com) and estimate the default spread for
that rating (US corporates and country bonds) over the treasury bond rate. This becomes a measure of the added country risk premium for that country.
I add this default spread to the historical risk premium for a mature equity market (estimated from US historical data) to estimate the total risk premium.
In the short term especially, the equity country risk premium is likely to be greater than the country's default spread. You can estimate an adjusted country risk
premium by multiplying the default spread by the relative equity market volatility for that market (Std dev in country equity market/Std dev in country bond)
In this spreadsheet, I have used the global average of equity to bond market volatility of 1.5 to estimate the country equity risk premium.

Enter the current risk premium for a mature equity market 5.00%
Do you want to adjust the country risk premium for the additional volatility of the equity market?
If no, use the country risk premium from the columns below
If yes, you can adjust the country risk premium for the relative volatility of the equity market below:
Enter the country risk premium from default spread = 5.50%
Enter the standard deviation in the equity market in the country = 61%
Enter the standard deviation in the long term bond issued by the country = 35%
The adjusted country risk premium for your country is = 9.59%

Country Region Local Currency Rating Adj. Default Spread Total Risk Premium
Albania Eastern Europe & Russia B1 400 11.00%
Angola Africa Ba3 325 9.88%
Argentina Central and South America B3 600 14.00%
Armenia Eastern Europe & Russia Ba2 275 9.13%
Australia Australia & New Zealand Aaa 0 5.00%
Austria [1] Western Europe Aaa 0 5.00%
Azerbaijan Eastern Europe & Russia Ba1 240 8.60%
Bahamas Caribbean A3 115 6.73%
Bahrain Middle East Baa1 150 7.25%
Bangladesh Asia Ba3 325 9.88%
Barbados Caribbean Baa3 200 8.00%
Belarus Eastern Europe & Russia B2 500 12.50%
Belgium [1] Western Europe Aa1 25 5.38%
Belize Central and South America B3 600 14.00%
Bermuda Caribbean Aa2 50 5.75%
Bolivia Central and South America B1 400 11.00%
Bosnia and Herzegovina Eastern Europe & Russia B2 500 12.50%
Botswana Africa A2 100 6.50%
Brazil Central and South America Baa2 175 7.63%
Bulgaria Eastern Europe & Russia Baa3 200 8.00%
Cambodia Asia B2 500 12.50%
Canada North America Aaa 0 5.00%
Cayman Islands Caribbean Aa3 70 6.05%
Chile Central and South America Aa3 70 6.05%
China Asia Aa3 70 6.05%
Colombia Central and South America Baa3 200 8.00%
Costa Rica Central and South America Baa3 200 8.00%
Croatia Eastern Europe & Russia Baa3 200 8.00%
Cuba Caribbean Caa1 700 15.50%
Cyprus [1] Western Europe A2 100 6.50%
Czech Republic Eastern Europe & Russia A1 85 6.28%
Denmark Western Europe Aaa 0 5.00%
Dominican Republic Caribbean B1 400 11.00%
Ecuador Central and South America Caa2 850 17.75%
Egypt Africa Ba3 325 9.88%
El Salvador Central and South America Ba2 275 9.13%
Estonia Eastern Europe & Russia A1 85 6.28%
Fiji Islands Asia B1 400 11.00%
Finland [1] Western Europe Aaa 0 5.00%
France [1] Western Europe Aaa 0 5.00%
Georgia Eastern Europe & Russia Ba3 325 9.88%
Germany [1] Western Europe Aaa 0 5.00%
Greece [1] Western Europe Caa1 700 15.50%
Guatemala Central and South America Ba1 240 8.60%
Honduras Central and South America B2 500 12.50%
Hong Kong Asia Aa1 25 5.38%
Hungary Eastern Europe & Russia Baa3 200 8.00%
Iceland Western Europe Baa3 200 8.00%
India Asia Ba1 240 8.60%
Indonesia Asia Ba1 240 8.60%
Ireland [1] Western Europe Ba1 240 8.60%
Isle of Man Financial Center Aaa 0 5.00%
Israel Middle East A1 85 6.28%
Italy [1] Western Europe Aa2 50 5.75%
Jamaica Caribbean B3 600 14.00%
Japan Asia Aa2 50 5.75%
Jordan Middle East Ba2 275 9.13%
Kazakhstan Eastern Europe & Russia Baa2 175 7.63%
Korea Asia A1 85 6.28%
Kuwait Middle East Aa2 50 5.75%
Latvia Eastern Europe & Russia Baa3 200 8.00%
Lebanon Middle East B1 400 11.00%
Lithuania Eastern Europe & Russia Baa1 150 7.25%
Luxembourg [1] Financial Center Aaa 0 5.00%
Macao Asia Aa3 70 6.05%
Malaysia Asia A3 115 6.73%
Malta [1] Western Europe A1 85 6.28%
Mauritius Africa Baa2 175 7.63%
Mexico Central and South America Baa1 150 7.25%
Moldova Eastern Europe & Russia B3 600 14.00%
Mongolia Asia B1 400 11.00%
Montenegro Eastern Europe & Russia Ba3 325 9.88%
Morocco Africa Ba1 240 8.60%
Netherlands [1] Western Europe Aaa 0 5.00%
New Zealand Australia & New Zealand Aaa 0 5.00%
Nicaragua Central and South America B3 600 14.00%
Norway Western Europe Aaa 0 5.00%
Oman Middle East A1 85 6.28%
Pakistan Asia B3 600 14.00%
Panama Central and South America Baa3 200 8.00%
Papua New Guinea Asia B1 400 11.00%
Paraguay Central and South America B1 400 11.00%
Peru Central and South America Baa3 200 8.00%
Philippines Asia Ba2 275 9.13%
Poland Eastern Europe & Russia A2 100 6.50%
Portugal [1] Western Europe Ba2 275 9.13%
Qatar Middle East Aa2 50 5.75%
Romania Eastern Europe & Russia Baa3 200 8.00%
Russia Eastern Europe & Russia Baa1 150 7.25%
Saudi Arabia Middle East Aa3 70 6.05%
Senegal Middle East B1 400 11.00%
Singapore Asia Aaa 0 5.00%
Slovakia Eastern Europe & Russia A1 85 6.28%
Slovenia [1] Eastern Europe & Russia Aa2 50 5.75%
South Africa Africa A3 115 6.73%
Spain [1] Western Europe Aa2 50 5.75%
Sri Lanka Asia B1 400 11.00%
St. Vincent & the Grenadines Caribbean B1 400 11.00%
Suriname Caribbean Ba3 325 9.88%
Sweden Western Europe Aaa 0 5.00%
Switzerland Western Europe Aaa 0 5.00%
Taiwan Asia Aa3 70 6.05%
Thailand Asia Baa1 150 7.25%
Trinidad and Tobago Caribbean Baa1 150 7.25%
Tunisia Africa Baa3 200 8.00%
Turkey Asia Ba2 275 9.13%
Ukraine Eastern Europe & Russia B2 500 12.50%
United Arab Emirates Middle East Aa2 50 5.75%
United Kingdom Western Europe Aaa 0 5.00%
United States of America North America Aaa 0 5.00%
Uruguay Central and South America Ba1 240 8.60%
Venezuela Central and South America B1 400 11.00%
Vietnam Asia B1 400 11.00%
Rating Default spread in basis points
A1 85
A2 100
A3 115
Aa1 25
Aa2 50
Aa3 70
Aaa 0
B1 400
B2 500
B3 600
Ba1 240
Ba2 275
Ba3 325
Baa1 150
Baa2 175
Baa3 200
Caa1 700
Caa2 850
Caa3 1000
sted country risk
country bond)

Yes ! Yes or No

! Use annualized historical volatility

! Use annualized historical volatility

Country Risk Premium

Has to be sorted in ascending order
6.00% Rating
Default spread in basis points
4.88% A1 85
9.00% A2 100
4.13% A3 115
0.00% Aa1 25
0.00% Aa2 50
3.60% Aa3 70
1.73% Aaa 0
2.25% B1 400
4.88% B2 500
3.00% B3 600
7.50% Ba1 240
0.38% Ba2 275
9.00% Ba3 325
0.75% Baa1 150
6.00% Baa2 175
7.50% Baa3 200
1.50% Caa1 700
2.63% Caa2 850
3.00% Caa3 1000
7.50%
0.00%
1.05%
1.05%
1.05%
3.00%
3.00%
3.00%
10.50%
1.50%
1.28%
0.00%
6.00%
12.75%
4.88%
4.13%
1.28%
6.00%
0.00%
0.00%
4.88%
0.00%
10.50%
3.60%
7.50%
0.38%
3.00%
3.00%
3.60%
3.60%
3.60%
0.00%
1.28%
0.75%
9.00%
0.75%
4.13%
2.63%
1.28%
0.75%
3.00%
6.00%
2.25%
0.00%
1.05%
1.73%
1.28%
2.63%
2.25%
9.00%
6.00%
4.88%
3.60%
0.00%
0.00%
9.00%
0.00%
1.28%
9.00%
3.00%
6.00%
6.00%
3.00%
4.13%
1.50%
4.13%
0.75%
3.00%
2.25%
1.05%
6.00%
0.00%
1.28%
0.75%
1.73%
0.75%
6.00%
6.00%
4.88%
0.00%
0.00%
1.05%
2.25%
2.25%
3.00%
4.13%
7.50%
0.75%
0.00%
0.00%
3.60%
6.00%
6.00%
 Foreign Local
Currency Currency
Rating Rating
Albania B1 B1 GOVERNMENT BOND RATIN
Angola Ba3 Ba3 IN LOCAL AND FOREIGN CURR
Local-Currency Government Bond Ratings reflect the government’s capacity and willingne
Argentina B3 B3 currency bonds on a timely basis.
Foreign-Currency Government Bond Ratings reflect the government’s capacity and willingn
Armenia Ba2 Ba2 denominated bonds on a timely basis.
Australia Aaa Aaa
Austria [1] Aaa Aaa
Azerbaijan Ba1 Ba1
Bahamas A3 A3
Bahrain Baa1 Baa1
Bangladesh Ba3 Ba3
Barbados Baa3 Baa3
Belarus B2 B2
Belgium [1] Aa1 Aa1
Belize B3 B3
Bermuda Aa2 Aa2
Bolivia B1 B1
Bosnia and He B2 B2
Botswana A2 A2
Brazil Baa2 Baa2
Bulgaria Baa3 Baa3
Cambodia B2 B2
Canada Aaa Aaa
Cayman Island Aa3 Aa3
Chile Aa3 Aa3
China Aa3 Aa3
Colombia Baa3 Baa3
Costa Rica Baa3 Baa3
Croatia Baa3 Baa3
Cuba Caa1 Caa1
Cyprus [1] A2 A2
Czech Republi A1 A1
Denmark Aaa Aaa
Dominican Rep B1 B1
Ecuador Caa2 Caa2
Egypt Ba3 Ba3
El Salvador Ba2 Ba2
Estonia A1 A1
Fiji Islands B1 B1
Finland [1] Aaa Aaa
France [1] Aaa Aaa
Georgia Ba3 Ba3
Germany [1] Aaa Aaa
Greece [1] Caa1 Caa1
Guatemala Ba1 Ba1
Honduras B2 B2
Hong Kong Aa1 Aa1
Hungary Baa3 Baa3
Iceland Baa3 Baa3
India Baa3 Ba1
Indonesia Ba1 Ba1
Ireland [1] Ba1 Ba1
Isle of Man Aaa Aaa
Israel A1 A1
Italy [1] Aa2 Aa2
Jamaica B3 B3
Japan Aa2 Aa2
Jordan Ba2 Ba2
Kazakhstan Baa2 Baa2
Korea A1 A1
Kuwait Aa2 Aa2
Latvia Baa3 Baa3
Lebanon B1 B1
Lithuania Baa1 Baa1
Luxembourg [1 Aaa Aaa
Macao Aa3 Aa3
Malaysia A3 A3
Malta [1] A1 A1
Mauritius Baa2 Baa2
Mexico Baa1 Baa1
Moldova B3 B3
Mongolia B1 B1
Montenegro Ba3 Ba3
Morocco Ba1 Ba1
Netherlands [1 Aaa Aaa
New Zealand Aaa Aaa
Nicaragua B3 B3
Norway Aaa Aaa
Oman A1 A1
Pakistan B3 B3
Panama Baa3 Baa3
Papua New Gu B1 B1
Paraguay B1 B1
Peru Baa3 Baa3
Philippines Ba2 Ba2
Poland A2 A2
Portugal [1] Ba2 Ba2
Qatar Aa2 Aa2
Romania Baa3 Baa3
Russia Baa1 Baa1
Saudi Arabia Aa3 Aa3
Senegal B1 B1
Singapore Aaa Aaa
Slovakia A1 A1
Slovenia [1] Aa2 Aa2
South Africa A3 A3
Spain [1] Aa2 Aa2
Sri Lanka B1 B1
St. Vincent & B1 B1
Suriname B1 Ba3
Sweden Aaa Aaa
Switzerland Aaa Aaa
Taiwan Aa3 Aa3
Thailand Baa1 Baa1
Trinidad and Baa1 Baa1
Tunisia Baa3 Baa3
Turkey Ba2 Ba2
Ukraine B2 B2
United Arab Em Aa2 Aa2
United Kingd Aaa Aaa
United States Aaa Aaa
Uruguay Ba1 Ba1
Venezuela B2 B1
Vietnam B1 B1
 GOVERNMENT BOND RATINGS
IN LOCAL AND FOREIGN CURRENCY
eflect the government’s capacity and willingness to generate local-currency revenue to repay its local-
s reflect the government’s capacity and willingness to mobilize foreign exchange to repay its foreign-currency
Country Region
Albania Eastern Europe & Russia
Angola Africa
Argentina Central and South America
Armenia Eastern Europe & Russia
Australia Australia & New Zealand
Austria [1] Western Europe
Azerbaijan Eastern Europe & Russia
Bahamas Caribbean
Bahrain Middle East
Bangladesh Asia
Barbados Caribbean
Belarus Eastern Europe & Russia
Belgium [1] Western Europe
Belize Central and South America
Bermuda Caribbean
Bolivia Central and South America
Bosnia and Herzegovi Eastern Europe & Russia
Botswana Africa
Brazil Central and South America
Bulgaria Eastern Europe & Russia
Cambodia Asia
Canada North America
Cayman Islands Caribbean
Chile Central and South America
China Asia
Colombia Central and South America
Costa Rica Central and South America
Croatia Eastern Europe & Russia
Cuba Caribbean
Cyprus [1] Western Europe
Czech Republic Eastern Europe & Russia
Denmark Western Europe
Dominican Republic Caribbean
Ecuador Central and South America
Egypt Africa
El Salvador Central and South America
Estonia Eastern Europe & Russia
Fiji Islands Asia
Finland [1] Western Europe
France [1] Western Europe
Georgia Eastern Europe & Russia
Germany [1] Western Europe
Greece [1] Western Europe
Guatemala Central and South America
Honduras Central and South America
Hong Kong Asia
Hungary Eastern Europe & Russia
Iceland Western Europe
India Asia
Indonesia Asia
Ireland [1] Western Europe
Isle of Man Financial Center
Israel Middle East
Italy [1] Western Europe
Jamaica Caribbean
Japan Asia
Jordan Middle East
Kazakhstan Eastern Europe & Russia
Korea Asia
Kuwait Middle East
Latvia Eastern Europe & Russia
Lebanon Middle East
Lithuania Eastern Europe & Russia
Luxembourg [1] Financial Center
Macao Asia
Malaysia Asia
Malta [1] Western Europe
Mauritius Africa
Mexico Central and South America
Moldova Eastern Europe & Russia
Mongolia Asia
Montenegro Eastern Europe & Russia
Morocco Africa
Netherlands [1] Western Europe
New Zealand Australia & New Zealand
Nicaragua Central and South America
Norway Western Europe
Oman Middle East
Pakistan Asia
Panama Central and South America
Papua New Guinea Asia
Paraguay Central and South America
Peru Central and South America
Philippines Asia
Poland Eastern Europe & Russia
Portugal [1] Western Europe
Qatar Middle East
Romania Eastern Europe & Russia
Russia Eastern Europe & Russia
Saudi Arabia Middle East
Singapore Asia
Slovakia Eastern Europe & Russia
Slovenia [1] Eastern Europe & Russia
South Africa Africa
Spain [1] Western Europe
Sri Lanka Asia
St. Vincent & the GrenCaribbean
Suriname Caribbean
Sweden Western Europe
Switzerland Western Europe
Taiwan Asia
Thailand Asia
Trinidad and Tobago Caribbean
Tunisia Africa
Turkey Asia
Turkmenistan Eastern Europe & Russia
Ukraine Eastern Europe & Russia
United Arab Emirates Middle East
United Kingdom Western Europe
United States of AmeriNorth America
Uruguay Central and South America
Venezuela Central and South America
Vietnam Asia