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"This is a normal figure given the rising budgetary income of the population, average monthly wage and overall monetary income of citizens," he told the press Friday.
Babayev said inflation is expected to make up slightly over 16% this year, but it could be as low as 10% if oil prices stabilize in 2008.
"Increases in world crude prices favorably affect Azerbaijan's growing revenues. At the same time, oil price rallies cause certain problems, as this leads to increases in the cost-value of domestic producers' goods. Moreover, price hikes make it more expensive to import commodities, such as flour and grain. We therefore believe that containing inflation at 16% in 2007 will be a good result of the government's efforts in present-day conditions," the minister said.
Babayev said inflationary increases this year were primarily caused by the rising prices for services. "Inflation constitutes 25% in this sector," he added.
The minister pointed to some artificial factors causing inflation, saying the government was working to eliminate them.
"We cannot influence the pricing policy pursued by entrepreneurs, as this could lead to the emergence of a 'shadow market' in the food industry. On its end, the Economic Development Ministry, through its anti-monopoly oversight service, conducts monitoring on a daily basis to track down businessmen artificially raising prices," Babayev said.

GDP growth
Azerbaijan's Gross Domestic Product (GDP) is predicted to exceed 25 billion manats (about $30 billion), or $3,500 per capita, by the end of 2007, Babayev said.
Economic growth made up 34.5% in 2006 and 27.1% in January-September 2007. Along with other sectors, GDP growth was observed in the private and non-oil sectors of the economy. The share of the private sector in GDP amounted to 81% last year, with the figure predicted at 86% in 2007, he told the press.
Babayev emphasized that state budget revenues are expected to reach 5.8 billion manats (over $6.8 billion), or 4.8 times above the 2003 figure, by the year-end. The indicator will further grow to hit 7.4 billion manats ($8.7 billion) in 2008.
The minister went on to say that the resource-rich South Caucasus republic currently tops the Commonwealth of Independent States (CIS) for the volume of investments per capita. $42.5 billion has been invested in the national economy since 1995, of which over 70% is made up by foreign and direct investments. The figure has exceeded $5 billion in the first nine months of 2007 alone and is expected to exceed $8 billion for the whole year.