Australia will suffer its first recession in 29 years after the economy shrank by 0.3 per cent in the March quarter.
New GDP figures have exposed the damage caused by the summer bushfires and the early stages of the coronavirus pandemic.
Growth for the year has slowed to 1.4 per cent.
That's the slowest annual growth rate since September 2008, when Australia was in the midst of the global financial crisis.
The economic decline is only going to get worse, with most of the pain packed into the current quarter.
Treasurer Josh Frydenberg said health measures adopted to protect Australians from coronavirus had hit the economy hard.
"Saving lives was our priority, and that has been the result," he told reporters in Canberra on Wednesday.
"Notwithstanding the success of the health measures that we have put in place, they have come at a significant cost, which is illustrated in the national account numbers today."
Australian Bureau of Statistics chief economist Bruce Hockman said Wednesday's figures capture just the beginning of the expected economic blow from the measures to contain the coronavirus.
The size of the hit was cushioned by increased government spending, which added 0.3 points to GDP, and strong exports, adding 0.5 points.
But household spending dropped by 1.1 per cent over the quarter.
This was the first drop since December 2008 and the annual result of a 0.2 per cent decline was the weakest since March 2009.
There was an unprecedented fall in spending on services - as social distancing rules and travel bans were introduced - and investment in housing continued to drop.
Summer's bushfires led to a strong drop in tourism-related activity, including travel, accommodation and food services in regional areas, while $1.4 billion was paid out in insurance claims.
But the natural disaster also drove increased government spending, with defence spending growing 1.1 per cent in the quarter as troops were deployed to help, and total state and local government expenditure jumping by 1.9 per cent.
The GDP figure is in the range anticipated by economists.
The June quarter numbers, which will be revealed in September and feed into the October 6 federal budget, are widely expected to be much worse - in the realm of a nine per cent contraction.
"Whichever way you look at it, Australia will be in recession," Commonwealth Bank senior economist Belinda Allen told AAP.
NAB head of markets research Ivan Colhoun said the size of the shock in April and May brought on an "instant recession".
"You couldn't travel, you couldn't go to work, everything just stopped," he told AAP.
The Reserve Bank said the depth of the economic slump could be less than predicted.
But governor Philip Lowe has reiterated the highly uncertain outlook and again called for the government to keep its fiscal support in the economy.
Australian Associated Press