Italy's services sector expanded for a fourth month running in April but at a slightly slower pace than the month before, a survey showed on Monday, pointing to continued modest growth in the euro zone's third-largest economy.

The HCOB Purchasing Managers' Index (PMI) for Italian services came in at 54.3 in April, slipping from 54.6 in March but still comfortably above the 50 level that separates growth from contraction.

The PMI survey's new business sub-index stood at 54.9 in April, down from 56.6 in March, while the employment indicator rose to 53.9 from 52.4.

"The Italian service sector is thriving and flourishing," said HCOB analyst Tariq Kamal Chaudhry.

However, the PMI for Italy's smaller manufacturing sector, released on Thursday last week, pointed to contraction in April after reporting modest growth in March.

The composite Purchasing Managers' Index, combining services and manufacturing, declined to 52.6 in April from 53.5 in March but remained above the key 50 threshold for a fourth consecutive month.

In its annual Economic and Financial Document, issued last month, the Italian government cut its growth forecast for this year saying the economy would grow by 1%, down from a 1.2% goal set in September.

Most independent forecasters are more downbeat, with the European Commission, the International Monetary Fund and the Organisation for Economic Cooperation and Development all forecasting Italian growth of 0.7% this year. (Reporting by Angelo Amante; Editing by Gavin Jones and Christina Fincher)