Australia's GDP shrinks at record pace as coronavirus pushes country into recession

The government did step up, splashing record amounts of cash to support jobs and incomes, though Wednesday's gloomy data underlines the need for more stimulus as the recovery is expected to be uneven and bumpy.

"Looking ahead, it is clear that the path back from the COVID-19 recession will be protracted," said Sarah Hunter, chief economist for BIS Oxford Economics.

"Growth in the September quarter will be weighed down by the lockdown in Victoria, and beyond this continued health concerns, ongoing restrictions and the dialling back of income support will all weigh on the economy," Hunter added.

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"We expect it to take until early 2022 for activity to return to pre-pandemic levels."

On its part, the Reserve Bank of Australia (RBA) slashed interest rates to a record 0.25% in an emergency meeting in March and on Tuesday expanded its cheap funding facility for the country's lenders to keep low-cost credit flowing in the economy.

It has promised to provide additional support if needed.