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The global economy is on an uptrend. Though the IMF recently lowered its global growth forecast for this year and the next from 3.1% to 2.9% and 3.8% to 3.6%, respectively, the rates are still at multi-year highs. IMF cut its projection citing recent weakness in China, Mexico, India and Russia. It now expects emerging economies to grow 4.5% this year, 0.5 percentage points lower than its prediction in July.

However, several other foreign economies, especially Europe, were off to a great start this year. The Eurozone economy grew 0.6% sequentially in the second quarter, in line with the preliminary estimate and following 0.5% growth in the previous period.

The U.S. economy appeared even brighter, having expanded at 3% in the second quarter, well above a preliminary reading of 2.6% and beating market expectations of 2.7%. However, political gridlock in the passage of Trump’s proposed policies are posing threats to stock market movement in the United States (read: ETF Asset Report: U.S. Equities Rule).

Against this backdrop, Zacks recently issued quarterly rank updates for ETFs. Below we highlight country ETFs that were upgraded to #2 (Buy) or #1 (Strong Buy) from #3 (Hold) in recent revisions.

Spain – iShares MSCI Spain Capped ETF (EWP - Free Report) – #3 to #2

Economic developments are looking up in Spain lately. The Spanish economy advanced 0.9% in Q2, higher than 0.8% in the previous period and in line with preliminary estimates. This marked the strongest expansion in nearly two years. Higher consumer spending made this possible (see all European Equity ETFs here).

The economy grew 3.2% in 2016. Notably, in 2016, the economy marked the third annual expansion in a row. The growth was higher than that of the United States and Euro zone. Unemployment rate in the second quarter, though higher than 17%, marks the lowest jobless rate since the last quarter of 2008. The ECB’s ongoing QE measure may also boost the ETF in the coming quarters.

France – iShares MSCI France ETF (EWQ - Free Report) – #3 to #2

The French economy expanded 0.5% sequentially in the three months ended Jun 2017, in line with the preliminary estimate and the previous two periods. This marked four quarters of expansion in a row, mainly supported by household consumption, government spending and exports. Year over year, the economy grew 1.7%, representing the strongest clip of expansion since the third quarter of 2011. Macron’s proposed pro-growth reforms, if implemented, are likely to take the French economy a notch higher (read: How will Macron's Labor Reforms Impact ETFs).

China – SPDR S&P China ETF (GXC - Free Report) – #3 to #1

The fund’s performance depends on the Chinese economy with a medium- to long-term view. Investors should note that China is the world’s second-largest economy and a key driver of global economic growth. The year 2017 opened on a strong note for the Chinese economy and the market (read: China's Coal Miner Merges With Utility Giant: ETFs in Focus).

The government took resort to economic and demographic reforms which seem to be paying off. Also, a turnaround in the manufacturing sector resulted in stabilization of the economy. The Chinese economy rose 6.9% year over year in the second quarter of 2017, in line with the previous period but ahead of market expectations of 6.8% expansion.

The figure was the strongest since the third quarter of 2015 on increased industrial output, retail sales pickup and fixed-asset investments. However, credit crunch issues, mounting debt burden and likely tension with the U.S. for supporting North Korea are some of the tensions.

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