The economy shrank less in the first quarter than initially estimated, but the contraction was still the severest since 1955, revised data released by the government Thursday showed.

Gross domestic product fell at a 14.2 percent annualized rate in the first three months of the year, slightly better than the Cabinet Office’s preliminary reading of a 15.2 percent contraction.

The economy has shrunk for four straight quarters since the April-June period last year, as exports and domestic demand have collapsed amid the worst postwar economic crisis.

Some analysts admitted the January-March quarter was disastrous for the world’s second-largest economy.

“Following the Lehman shock, the latter half of fiscal 2008 was unbearably severe” for the economy, said Hiroshi Hanada, an economist at Sumitomo Trust & Banking Co.

The GDP contraction in the October-December period last year was also revised to an annual pace of 13.5 percent from the preliminary 14.4 percent.

For all of fiscal 2008, the economy shrank 3.3 percent.

On a quarterly basis, GDP fell 3.8 percent, better than the initial 4.0 percent reading.

Exports plummeted 26 percent from the previous quarter. Private corporate investment fell 8.9 percent, while housing investment dropped 5.5 percent.

The domestic demand deflator posted a 1.1 percent fall from the previous year.

Hideki Matsumura, senior economist at Japan Research Institute, noted this reading suggests the deflationary trend could intensify.

“Due to the worsening income situation, households shifted their spending to cheaper goods,” Matsumura said. “It became clearer that there are signs that the deflationary tendency will become strong.”

Analysts were split on the outlook for the economy.

Matsumura predicted that boosted by the government’s stimulus packages, the economy would grow from April to September.

“With this huge contraction, the rapid fall of the economy has stopped for now,” he said.

Sumitomo’s Hanada, however, disagreed.

“The negative growth will continue at least for around half a year,” Hanada said. He predicted that corporate investment in plants and equipment will continue to decline while housing investment falls.

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