Japan's economy shrank at an annual rate of 2.5 percent in the July-September quarter, downgraded to the sharpest contraction in more than four years as a string of natural disasters weighed on capital expenditure, government data showed Monday.

The Cabinet Office had initially reported that real gross domestic product, the total value of goods and services produced in the country adjusted for inflation, shrank 1.2 percent in the third quarter of 2018.

It was the sharpest contraction since a 7.3 percent shrinkage logged in the April-June quarter in 2014, when the world's third-largest economy lagged under an increase in the consumption tax, and compared with a contraction of 2.1 percent forecast by private-sector economists in a Kyodo News poll.