(NICOSIA) - European Central Bank governing council member Athanassios Orphanides said on Tuesday that the Eurozone economy would slow down but he ruled out a recession.

"We don't expect a recession in Europe but we do expect a deceleration of the economy compared to the rate of growth last year," the Cyprus central bank governor told reporters.

Orphanides, who is to attend an ECB general council meeting in Frankfurt on Thursday to review monetary policy decisions, said Cyprus's economic prospects for 2008 were "reasonably good".

"Our only major concern at the moment are the inflationary trends that exist in the Cyprus economy."

Orphanides said record oil prices could prove to be a brake on Cyprus's economic growth, which reached 4.3 percent last year and is expected to hover around four percent this year.

He said there was also a need for wage restraint during a period of collective bargaining among public service unions and the government.

Orphanides made the comments after his first meeting with new communist president Demetris Christofias who has assured the business community he is committed to a mixed economy.

Cyprus joined the eurozone on January 1 when it adopted the European single currency.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.