File photo shows the Euro logo in front of the European Central Bank (ECB) in Frankfurt, Germany.
The Organization for Economic Cooperation and Development (OECD) has cut its growth forecast for the most advanced economies in the world.
The OECD said in its latest semi-annual Economic Outlook report released on Wednesday that in the first half of 2013, the economic growth of advanced countries will be less than expected.
It added that the advanced economies would see growth after the middle of 2013 Å“in the absence of adverse events.”
The OECD further said that the 17-nation eurozone is expected to witness a 0.6-percent contraction in 2013 as the bloc is estimated to remain in recession for a second year.
The organization also warned that economic activity in the crisis-hit eurozone is still falling, which reflects Å“ongoing fiscal consolidation, weak confidence and tight credit conditions, especially in the periphery.”
The report added that Å“protracted weakness” in the eurozone Å“could evolve into stagnation with negative implications for the global economy.”
The eurozone is still in need of tackling problems in its financial sector holding back the flow of credit, said OECD chief economist, Pier Paolo Padoan.
Earlier in May, the Eurostat data agency said eurozone unemployment rate hit a record-high of 12.1 percent in March.
EU figures indicate that nearly a quarter of the blocâ„¢s population, equivalent to 120 million people, is at risk of poverty and social exclusion.
Europe plunged into financial crisis in early 2008 and most European governments have taken tough austerity measures to contain their debt crises.
MR/KA/SS
This article originally appeared on: Press TV