Average risk free investment rate for selected countries in Europe 2023

The risk-free rate is a theoretical rate of return of an investment with zero risk. This rate represents the minimum interest an investor would expect from a risk-free investment over a period of time. It is important to remember that the risk-free rate is only theoretical as all investments carry even the smallest of risks. A higher risk-free rate illustrates that even with a so-called "zero risk" investment, investors would want a higher return because of the countries associated investment risks.

Average risk-free rate (RF) rate of investment and market risk premium

As of 2023, Ukraine had the highest risk-free rate of the countries displayed with 30.6 percent among the European countries under observation. When it comes to the market risk premium, or the rate of return expected by investors over the risk that investments hold, Ukraine displayed a higher market risk premium during the same period.  

Investment in selected European countries

SInce 2017, both the risk-free rate and average market risk premium in Turkey have been excessively high. Even more information on market risk premiums, average risk free rates, and required return on equity in selected European countries can be found in the report on market investments in Europe.