The economy of the eurozone contracted by 0.2 percent in the second quarter after posting flat growth in the first three months of the year, Eurostat, confirmed on Thursday. Year-on-year, the euro area's Q2 gross domestic product (GDP) even dipped 0.5 percent.

The latest figures showed a marked divergence in performance from US and Japanese rivals. Eurostat said the United States' GDP increased by 0.4 percent in the second quarter, after 0.5 percent in the first. The Japanese economy rose by 0.3 percent between April and June, following a 1.3-percent increase at the start of the year.

According to the Organization for Economic Cooperation and Development (OECD), even the eurozone's powerhouse, Germany, will also experience a slight recession in the second half of 2012.

German engine sputtering

In the latest OECD growth outlook, the policy body of 34 of the world's industrialized nations said the German economy would contract by 0.1 percent in the third quarter and 0.2 percent in the final three months of the year. However, it conceded that full-year growth in Germany would still be positive, expecting 0.8-percent growth throughout 2012.

The OECD warned that the eurozone debt crisis posed the greatest risk to the global economy and called for further action, including bond-purchasing by the European Central Bank (ECB).

"Concerns about the possibility of [a Greek] exit from the euro area are pushing up government bond yields, which in turn reinforces break-up fears," the organization commented. "It's crucial to stem these exit fears."

The OECD released its comments as a key ECB board meeting, likely to focus on this issue, began in Frankfurt.

hg/msh (Reuters, AFP, dpa)