Turkey faces an economic tight-rope walk in 2014, analysts warn, at risk from global turbulence and under pressure from the markets to cut consumption in a highly-charged election year.
The country has enjoyed dynamic growth in recent years, proving largely immune to the economic woes in Europe and the conflicts and crises in the Middle East.
Prime Minister Recep Tayyip Erdogan, who has been at the helm for 11 years, has said Turkey remains a "safe port" for investors because of the government's "stability-oriented policies".
But economists warn that the $800 billion (600 billion euro) economy remains at risk because of its yawning current account deficit and foreign debt levels, and concerns that the government could take its eye off the ball because of the elections.
Gross domestic product (GDP) expanded by a record 8.9 percent in 2010, making it one of the world's fastest growing economies.
But Ankara is now predicting growth of just 3.6 percent for this year and 4.0 percent for 2014, with some economists predicting the rate could come in slightly lower.
"Turkey's economy has become ver vulnerable due to global developments and I believe the tapering story and uncertainties will increase the vulnerability next year," said Deniz Cicek, economist at Finansbank in Istanbul.
The lira was hard hit in the summer after the US Federal Reserve signalled it might begin to reduce, or taper, its monetary stimulus, causing money to flood out of emerging markets such as Turkey.
The central bank, under government pressure to hold interest rates down to sustain growth, is fighting hard to shore up the local currency, using foreign reserves to buy lira.
It is currently changing hands at just over two to the dollar, after weakening by 13 percent this year.
Cicek said the elections next year would also be a test of confidence for foreign investors.
"Of course the elections are a question mark but its impact on the economy will be limited as long as public spending does not balloon out of control."
Leading credit rating agencies Moody's and Standard and Poor's highlighted potential risks from Turkey's spiralling current account deficit and its external debt level.
The deficit in the current account -- the measure of a country's trade performance -- is estimated to have swelled to more than seven percent of GDP and is seen staying above that level next year, according to analysts.
Turkey has been relying mostly on short-term financial investments to cover the gap, but these flows are volatile.
Moody's said in a December report that the Fed tapering of its stimulus could pose difficulties for Turkey to meet its medium-term financing needs, but that the country had "sufficient buffers" to cope.
In November, the IMF observed rising domestic consumption was stoking inflation and worsening the current account deficit, and urged Turkish authorities to "tighten their macroeconomic policies and step up structural reforms".
One measure to try tackle this was recently announced: a crackdown on excessive consumer debt that will see tighter limits imposed on credit cards, including restrictions on what people may purchase.
Inflation also remains high at over 7.0 percent, although the central bank is forecasting it to drop 6.8 percent this year and 5.3 percent in 2014.
On the political front, the approach of elections as well as signs of fractures in Erdogan's Islamic-rooted Justice and Development Party (AKP) are creating uncertainty.
"The government has shown surprising restraint in fiscal policy, adopting budget plans that do not fall into the typical election-cycle trap," said Andy Birch, senior economist at IHS Global Insight in the United States.
"There is a large downside risk, however, if there becomes a significant rift within the AKP that would divert the government's energies away from managing the economy and instead to internal political struggles."
There is a large downside risk, however, if there becomes a significant rift within the AKP that would divert the government's energies away from managing the economy and instead to internal political struggles."
The budget deficit is forecast to shrink to 19 billion lira ($9.6 billion), or 1.2 percent of GDP, by the end of this year and Finance Minister Mehmet Simsek brushed off concerns that the government would ease its fiscal policy for the elections.
"We have never prepared the budget with elections in mind," he said in October. "We took necessary measures even at the most difficult times. We have never been trapped by populism."
Gareth Leather, Asia economist at Capital Economics in London, dubbed Turkey along with Brazil, India, Indonesia and South Africa as the "Fragile Five".
The emerging economies were the worst hit by the summer currency sell-off and are all due to hold important elections next year, he said.
Turkey is heading to municipal elections in March, seen as a key test for Erdogan whose image took a battering at home and abroad over the mass anti-government street protests in June.
The local vote will be followed by a presidential ballot in August and parliamentary polls in 2015.
Leather said Turkey needs to raise its domestic savings rate to reduce its dependence on overseas borrowing but predicted that the government "will probably want to wait until 2015's parliamentary elections are out of the way, at the earliest, before making any painful choice