ROME (Reuters) - Italy's modest economic growth is likely to slow down in the near term, statistics bureau ISTAT said on Tuesday, casting a shadow over the government's hopes of reaching its full-year growth target of 1.2 percent this year.


In its monthly economic note ISTAT said its composite forward-looking indicator was continuing to head downwards due to weakness in business expectations and manufacturing orders, "pointing to a slowdown in near-term economic growth."


The euro zone's third-largest economy emerged from a three-year recession at the start of 2015, but growth slowed during last year and has remained listless.


Gross domestic product rose 0.3 percent in the first quarter from the previous three months, compared with expansion of 0.5 percent in the euro zone as a whole.


Italy's dominant services sector shrank for the first time for 17 months in May, a survey showed on Friday, and the manufacturing sector also showed a slowdown in activity.


(Reporting By Gavin Jones)