Investors hunting yield in European sovereign debt are increasingly targeting Eastern Europe—notably Bulgaria, Hungary and Lithuania—on improved economic and fiscal metrics and relatively higher yields versus Western peers. Political transitions and prospects of euro adoption, subject to Brussels’ strict entry conditions, add to the case. Key risks include local-currency volatility, shallow secondary-market liquidity, outsized exposure to pan-European debt and energy shocks (notably for landlock

2026-09-15

Investors hunting yield in European sovereign debt are increasingly targeting Eastern Europe—notably Bulgaria, Hungary and Lithuania—on improved economic and fiscal metrics and relatively higher yields versus Western peers. Political transitions and prospects of euro adoption, subject to Brussels’ strict entry conditions, add to the case. Key risks include local-currency volatility, shallow secondary-market liquidity, outsized exposure to pan-European debt and energy shocks (notably for landlocked Hungary) and persistently high debt and deficits across parts of the region.

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