WORRY SIGNS: A Japanese bussinessman in Tokyo on Monday. (AFP)

Tokyo, Nov. 17: Japan, the world’s second-largest economy, has officially slipped into recession, hurt by weak export growth and steep cuts in corporate spending amid the worsening global slowdown.

Japan’s gross domestic product shrank at an annual rate of 0.4 per cent from July to September after declining a revised 3.7 per cent in the previous quarter, the government said on Monday.

It was the first time since 2001 that Japan’s economy has contracted for two consecutive quarters, the definition of a recession.

The decline adds to the grim outlook for the global economy, after Hong Kong and the European Union released data on Friday that showed they were in recession. Europe’s largest economy, Germany, also announced last week that it was in recession.

The US may follow, after Washington said last month that the American economy contracted in the third quarter.

The figure was worse than expected by economists, who had predicted Japan’s $5 trillion economy would narrowly avert a recession by posting slight growth.

“Downside risks to the economy are growing further,” Kaoru Yosano, the economic minister, told reporters. “Japan is in a very serious situation.”

Until now, Japan has stood apart from most other developed nations because its banks were relatively unscathed by the financial crisis. But Monday’s data showed that America’s woes reached Japan via its exports, as Americans spend less on Japanese cars, televisions and machine tools.

Japan is particularly affected by these swings in the US, the world’s largest economy, because it has been largely dependent on sales abroad for growth. Domestic consumption has remained weak in this rapidly aging society, keeping Japan’s overall growth rates anaemic even during its long growth cycle that extended from 2002 until this year.

Faltering demand overseas combined with higher imported energy prices reduced growth in Japan from 0.4 per cent in the previous quarter to 0.2 per cent in the July-September quarter, according to Monday’s figures. Spending by Japanese companies fell 1.7 per cent from the previous quarter, its third straight decline. Household consumption rose 0.3 per cent from the previous quarter.