Turkish deputy PM Babacan to maintain oversight of economy: officials

ANKARA Sun Aug 31, 2014 3:25am EDT

Turkey's Deputy Prime Minister Ali Babacan leaves Kocatepe Mosque after Friday prayers in Ankara August 29, 2014. REUTERS/Umit Bektas

Turkey's Deputy Prime Minister Ali Babacan leaves Kocatepe Mosque after Friday prayers in Ankara August 29, 2014.

Credit: Reuters/Umit Bektas

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ANKARA (Reuters) - Turkish Deputy Prime Minister Ali Babacan will retain overall responsibility for the economy in the new government, senior officials told Reuters late on Saturday, a move likely to ease concerns of a turf war within the cabinet.

Babacan, and more recently Finance Minister Mehmet Simsek, have been part of a well-respected economics team that has helped steer Turkey through a decade of growth and stability.

The announcement of new Prime Minister Ahmet Davutoglu's cabinet on Friday saw both men retain their posts.

But the appointment of Numan Kurtulmus, head of economic affairs in the ruling AK party, as another Deputy Prime Minister, had unnerved markets already unsettled by signs of a slowdown and growing fears over the country's fiscal policy becoming increasingly politicized.

"Babacan will be in charge of economic affairs. Nothing has been changed on the economy side for the government," one senior official in the prime ministry said, adding that a formal announcement would be made on Monday.

"I know Numan Kurtulmus was in charge of economic affairs in the party. But he will be responsible for some other political issues. The economics team will work as before," the official said.

A second official in the prime ministry confirmed the decision.

President Tayyip Erdogan, inaugurated on Thursday, has made it clear he will go beyond the largely ceremonial role heads of state have performed hitherto, and investors will be watching to see how the new balance of power settles in the coming months.

On Saturday, Erdogan's office confirmed that an influential but divisive aide who last year accused protestors of trying to kill Erdogan using telekinesis has been appointed as his chief economics advisor.

(Reporting by Nicholas Tattersall and Orhan Coskun, writing by Jonny Hogg; Editing by Hugh Lawson)

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