(Updates with economist comment)
BRUSSELS, July 8 (Reuters) - A steep drop in exports and corporate investment led to a record economic contraction in the euro zone in the first quarter of 2009, the European Union's statistics office said on Wednesday.
Eurostat confirmed its earlier estimate that gross domestic product in the 16 countries using the euro fell 2.5 percent on the quarter, and revised the year-on-year contraction to 4.9 percent from 4.8 percent. [ID:nBRQ007429]
It said the currency area's exports plunged 8.8 percent quarter-on-quarter as the global financial crisis triggered the worst recession since World War Two in many parts of the world.
In the United States during the first quarter, GDP contracted by 1.4 percent on the quarter and in Japan it sank by 3.8 percent.
"The good news is that the first quarter GDP data are old news and the rate of contraction within the euro zone clearly moderated substantially in the second quarter," said Howard Archer, chief European economist at consultancy IHS Insight.
Analysts and the European Commission expect smaller GDP falls in the remaining quarters of 2009 and a modest recovery in 2010.
"The euro zone outlook still looks far from bright and we suspect that sustainable recovery will be delayed until 2010 and then develop only gradually," Archer said.
Eurostat said euro zone corporate investment fell by 4.1 percent quarter-on-quarter. Household consumption fared better, declining 0.5 percent. Government consumption grew by 0.2 percent as billions of euros were spent to boost the economy.
But growing unemployment, which hit a 10-year high of 9.5 percent in May, is set to limit people's spending power and undermine any turnaround.
Euro zone finance ministers said this week that the euro zone's potential growth, or the highest expansion sustainable over time, could fall below 1.0 percent this and next year from 2.2 percent recorded before recession struck.
With inflation in negative territory, the European Central Bank is expected to leave its main interest rate at a record low of 1.0 percent well into next year.
Eurostat said that in the wider 27-nation European Union, GDP contracted by 2.4 percent on the quarter and 4.7 percent annually, with only Poland and Cyprus having escaped recession.
In Germany, the euro zone's biggest economy, GDP shrank by 3.8 percent quarter-on-quarter and 6.9 percent year-on-year. (Reporting by Marcin Grajewski; Editing by Mike Peacock)