Japan fell into a recession in the third quarter for the first time since 2001, as the impact of the global slowdown took its toll on the world’s No. 2 economy.

Japan’s gross domestic product, or the total value of the nation’s goods and services, dropped at an annual pace of 0.4 percent in the July-September period as companies sharply curtailed spending, the government said today.

The weaker-than-expected result indicates that Japan, along with the euro-zone, is now technically in a recession, defined as two straight quarters of negative growth. GDP in the April-June period fell a revised 3.7 percent and rose 4.0 in the first quarter.

Economists surveyed by Kyodo news agency had predicted an annualized 0.1 percent rise in the third quarter.

But the worst may be yet to come, economists say, especially with dramatic falls in demand overseas for trademark Japanese products like cars and gadgets.