Japan¡¯s industrial output unexpectedly fell in August, raising concern that the economy may have fallen back into its second recession since Prime Minister Shinzo Abe took government.

The slump in production is likely to intensify debate on the need for Abe¡¯s administration to increase spending and for the central bank to boost its already unprecedented monetary stimulus.

Falling prices, weak consumer spending and a slowdown in key export market China are weighing on Japanese businesses, which are holding back investment and building up inventories in warehouses.

¡°Risks of a contraction are increasing,¡± said Toru Suehiro, an economist at Mizuho Securities Co. in Tokyo. ¡°Production is pretty weak, led by a slowdown in China and poor domestic consumer spending. There is no sign for output to pick up quickly.¡±

Production dropped 0.5 in August from July, when it slid 0.8 percent, the trade ministry said on Wednesday. Economists had projected a 1 percent gain while the government had estimated a 2.8 percent expansion. Retail sales data also showed weakness, with no improvement in August from a month ago.

Abe is returning his attention to the economy after focusing on the passage of unpopular defense bills in recent months. Last week he unveiled a new economic growth target and vowed to halt Japan¡¯s population slide.

He has laid out three new targets of ¡°Abenomics¡± ¡ª a strong economy, child-care support and social security. When Abe took office in 2012, he championed another trio: monetary stimulus, flexible fiscal policy and structural reforms.

Inventories rose 0.4 percent in August from July, and expanded in five of eight months this year. As stockpiles of unsold goods mount, companies are less likely to expand output in the future.

Production declined in 10 out of 15 industries included in the data, including general purpose machinery and electronics.

¡°Policymakers will consider an extra budget and further monetary easing,¡± said Masaki Kuwahara, an economist at Nomura Securities Co. in Tokyo. He said any weakness in the central bank¡¯s Tankan survey ¡ª a measure of business confidence and intentions due Thursday ¡ª would increase pressure for the BOJ to adjust policy at an Oct. 30 board meeting.

Before the production data, only one of 29 analysts surveyed by Bloomberg projected a contraction in the three months through Sept. 30. Kuwahara said Nomura now has to consider the possibility of recession.