Investors, markets to keep close eye on Turkish economy after PM steps down

Global investors and markets will be closely following Turkey's economy after the announcement from Prime Minister Ahmet Davuto?lu that he is stepping down. 

Before elaborating why, let's just very briefly recap what has happened over the past week in the country. 
Late on May 1, a new political blog suddenly appeared and became a hit. Dubbed the "Pelican Brief," the blog included a single entry eccentrically and boldly explaining how President Recep Tayyip Erdo?an and Davuto?lu had been embroiled in a "rift." Although this text was not taken seriously by many people, events just after it appeared were quite interesting.

Davuto?lu, the prime minister and leader of the Justice and Development Party (AKP), said in a press meeting on May 5 - after a meeting of his party's Central Executive Board (MYK) - that he had decided to step aside. His decision came after the party's consulting bodies and Erdo?an, pointing to a recent move by the 50-member Central Decision and Executive Board (MKYK), removed Davuto?lu's right to appoint local AKP leaders.

Turkish stocks and the Turkish Lira tumbled on concerns of mounting political turbulence, although they started to recover slightly after Davuto?lu's press meeting. 

The key point for investors and markets will be what happens next in terms of Turkey's economic reform agenda and institutional framework. These have been problematic for a while in the face of an obviously slowing economy and generally rising unpredictability. 

It is no secret that Turkey's economic bureaucracy has been reshuffled in a dramatic fashion over the last couple of years as contradicting views have appeared and grown. This has created a kind of "dual-administration" in Ankara. 

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