MNI (ROME) - Signs of a decisive improvement in eurozone domestic demand are emerging only slowly, Bank of Italy Governor Fabio Panetta said in a speech on Tuesday, noting that strong Q1 economic growth came mainly from foreign demand.

Estimates for Q2 show output grew moderately supported by services, but companies pointed to still-weak industrial activity, Panetta said.

The governor played down worries over high services inflation, which, while “not unmotivated should be relativised” as “services prices tend to move differently from goods”. Services inflation has always outpaced goods inflation since the end of the 1990s in the euro area, he said. (See MNI SOURCES: Even ECB Hawks Confident Inflation On Track)