Tokyo, May 20 (AFP) Japanese GDP expanded 0.5 per cent in the first quarter of this year, official data showed Monday, in a better-than-expected result for the world's third-largest economy.

It was the second successive expansion for the Japanese economy after growth of 0.4 per cent in the fourth quarter of last year and defied gloomy expectations by analysts who predicted a small decline at the start of 2019.

The latest data was being closely watched amid speculation Prime Minister Shinzo Abe's government could postpone a planned sales tax hike for the third time if the GDP growth figure were very weak.

Net exports contributed strongly to the latest growth figures but only because the fall in imports outweighed a decline in exports, the Cabinet Office said.

Takeshi Minami, chief economist at Norinchukin Research Institute, said: "The headline figures were unexpectedly good but if you take a closer look, the data was not something we should be pleased about." "Rather, the data clearly showed weak points in the economy with poor consumption and corporate investment on plants and equipments," he told AFP.

The latest indication of Japan's economic health comes amid uncertainty over the global economy, including US-led trade tensions, Brexit and other factors.

Last week, the cabinet office said its key economic indicator "composite index" shows the Japanese economy was "worsening" for the first time in more than six years.

The use of the expression, the weakest in the five-scale system for assessing the key index, suggests that Japan may have entered into a recession, analysts said. Late last month, the Bank of Japan revised down its estimate for growth, also saying Japan would fail to hit its two per cent inflation target even by 2020. (AFP)

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