Industrial output dropped more than forecast in May as production of transport equipment and cars slowed, sapping a recovery in the world's third-largest economy.

Output fell 2.2 percent from April, when it rose 1.2 percent, the Ministry of Economy, Trade and Industry said Monday. Economists had forecast a 0.8 percent decline. Retail sales rose 1.7 percent from the previous month, which was more than estimated.

The rebound from the recession last year is showing signs of losing momentum at a time when global uncertainty is increasing with the slowdown in China and the financial turmoil in Greece.