Turkey’s economy is making a turn for the better. Prudent actions taken by the government during the worst of the crisis may have provided the necessary catalyst for a strengthening economy and related exchange traded fund (ETF).

Acknowledging Turkey’s “resilience” during the global financial crisis, Fitch Ratings upgraded Turkey’s sovereign debt to BB+, the highest speculative-grade rating, reports Seda Sezer for Bloomberg. Turkey’s ISE National 100 Index rose on the favorable news and some observers believe that Turkey’s strong technical position may push the index to new highs.

Fitch Ratings also noted that Turkey’s “credit fundamentals and debt tolerance are stronger than previously thought,” writes Lars Rasmussen for FXStreet. An easing fiscal policy, the government’s support for growth through counter-cyclical policies and liquidity in global financial markets all contributed to the decision for a ratings upgrade.

The Turkish economy is projected to expand 2.6% in 2010 and 4.3% in 2010 after contracting 6.9% in 2009. Inflation is expected to average 5.9% in 2010. (Where Turkey is getting its enrichment).

Annual inflation was close to 5.09% in October, a 40-year low, but analysts believe the return of normal economic activity and the government’s heavy borrowing could put pressure on inflation again.

Turkey is currently engaging in talks with the International Monetary Fund (IMF) in hopes of striking a new stand-by deal, writes Alexandra Hudson for Forbes.

For more information on Turkey, visit our Turkey category.

  • iShares MSCI Turkey Invest Mkt Index (NYSEArca: TUR): up 93.5% year-to-date


Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.