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.
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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)