Eurozone gross domestic product (GDP) contracted by 0.2% in the second quarter of 2012 compared to the previous quarter, according to a preliminary reading published by Eurostat.
In first quarter of 2012, the growth rate for the currency bloc was flat.
Compared with the same quarter in 2011, GDP for the euro area dropped by 0.4%.
The country-specific readings showed that GDP fell the most in Portugal, down 1.2%, while Spain's economy contracted by 0.4% in second quarter.
The eurozone doesn’t yet meet most economists’ definition of recession, which is two straight quarters of declining GDP.
Meanwhile, the debt-strapped eurozone’s two biggest economies - Germany and France - avoided shrinking between April and June.
But, most economists fear that the two core eurozone economies will struggle during the rest of the year.
Separate data from Eurostat on Tuesday showed euro area's industrial production falling further in June.
That suggests that the eurozone economy’s momentum was slowing at the end of the second quarter of 2012.
Industrial output fell 0.6% in June from May and was 2.1% lower than a year before, the statistics office said today.
Italy’s economy contracted for a fourth straight quarter, shrinking 0.7%.
In Spain, which received external aid earlier this year, GDP dropped 0.4% from the first quarter, when it fell 0.3%. Portugal’s economy contracted 1.2% in that period and Cyprus also remained in a recession.
The statistics office didn’t release quarterly data for Ireland and Malta. Both economies contracted in the first quarter.
Greece’s GDP is set to drop for a fifth straight year.
The eurozone economic contraction may deepen in the current quarter, according to many economists.
The ECB’s quarterly survey of professional forecasters showed the euro-area economy may contract 0.3% this year instead of a previously projected 0.2%.
The economy will expand 0.6% and 1.4% in 2013 and 2014, it said.