The economic hit from the bushfires and the early moves to slow the spread of coronavirus will be laid bare.
Economists predict the March quarter national accounts figures, to be released Wednesday, will show the economy shrank between 0.1 per cent and 0.5 per cent.
Commonwealth Bank senior economist Belinda Allen says the first three months of the year were mixed.
“At the start of the quarter we were talking about the impact of bushfires on tourism, at the end of the quarter we were talking about the impact of coronavirus on tourism,” she told AAP.
Tuesday’s data from the Australian Bureau of Statistics showed wages and salaries were flat in the March quarter.
The tax take dropped 5.4 per cent between December and March and government spending grew by two per cent.
This lift in government consumption is expected to add about 0.3 percentage points to growth.
But the slump in the March quarter will be far outweighed by the sharp drop anticipated in June’s figures.
“Whichever way you look at it, Australia will be in recession,” Ms Allen said.
The pace of recovery will hinge on consumer confidence staying buoyant, she said.
“Just because there are places for households to spend their money on doesn’t mean they will.”
CBA is predicting a nine per cent contraction in the June quarter.
The Reserve Bank says 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.
NAB head of markets research Ivan Colhoun said the March quarter figures were incredibly outdated given the subsequent effect of the lockdown in April and May.
“It’s the most irrelevant GDP figure ever published,” he told AAP.
It wouldn’t matter whether the nation ended up with a technical recession – two quarters of negative growth – 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 said.
Shadow treasurer Jim Chalmers said the national accounts would indicate what the economy looked like before measures to contain pandemic took hold.
“We know that things have got much more difficult since then,” he told reporters in Brisbane.
“The country desperately needs an effective response to this crisis to be confidently executed, and a plan to bolster the recovery and set Australia up for the future.”