Turkey's current account is expected to register a $15 billion (TL 204.35 billion) deficit in 2021, lower than government expectations, a poll showed, mainly due to rising imports of energy and intermediary goods.

The median response of 13 economists in the Reuters poll on Monday was for a deficit of $14.95 billion in 2021, compared to the government estimate of $21 billion. Forecasts ranged between a deficit of $14.32 billion and $30 billion.

Turkey’s import-reliant economy, worth $717 billion in 2020, has been prone to big trade deficits and a boom-bust growth cycle that was exacerbated by the coronavirus pandemic.

The current account recorded a deficit of $36.72 billion in 2020, due mostly to a sharp increase in the trade deficit and declining tourism revenues due to the pandemic fallout.

The median estimate for December showed a deficit of $4 billion, with estimates ranging between a deficit of $3.5 billion and $7.3 billion.

The foreign trade deficit, a major component of the current account, widened 49.3% year-over-year in December to $6.79 billion, official data showed.

Shoring up the current account deficit has been Ankara’s main priority under its new economic model, which officials say will be achieved through raising exports with a competitive exchange rate.

The manufacturing sector dependency on imported intermediary goods is one of the main obstacles for the economy to record a current account surplus, said Gedik Yatırım economist Serkan Gönençler, who expects the current account shortfall to stand at around 0.3% of the gross domestic product (GDP) in 2021.

“The continuation of the narrowing trend in the current account deficit looks reasonable in 2022 with the expectation of strong exports and tourism income potential with current exchange rate levels and narrowing consumer goods imports,” Gönençler said.

“The increase in the cost of energy imports and the economy’s dependency on imported intermediary goods can limit the velocity of the narrowing.”

President Recep Tayyip Erdoğan has been endorsing a model based on lower borrowing costs, which he says will boost production, employment and exports, and also eventually help Turkey to solve the chronic current account deficit problem and contribute to stabilizing the Turkish lira.

To support the drive, Turkey’s central bank has slashed its interest rates by 500 basis points since September to 14%, before pausing the easing cycle last month.

The lira had weakened 44% last year and hit a record low of 18.4 against the United States dollar in late December but rebounded after Erdoğan’s announcement of a scheme to boost lira deposits by protecting them against depreciation.

The initiative had helped the lira rally sharply to just over 10 and then settle at current levels just under 14 to the dollar.

The central bank is scheduled to announce the December current account data on Feb. 11.