Shadow treasurer Jim Chalmers says even if this week's economic growth numbers prove to be positive, there is little doubt Australia is in a recession that has ended 29 consecutive years of expansion.
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The national accounts for the March quarter are released on Wednesday, which will take into account the early stages of the coronavirus pandemic.
Economists' forecasts centre on a 0.3 per cent economic contraction in the quarter, which will drag annual growth down to just 1.4 per cent.
The annual growth rate at 2.2 per cent as of the December quarter was already well below its long-running average of 2.8 per cent.
Forecasts range for a decline of a much as 0.7 per cent in the quarter.
"Even if the March quarter was not negative, the idea that we're not in a recession right now is fanciful," Dr Chalmers told Sky News' Sunday Agenda program.
"Most economists, the government, the Reserve Bank, and certainly Labor expect that the June quarter will be much worse than the March quarter."
Treasury has forecast a contraction of 10 per cent in the June quarter to be reported in September.
A technical recession is commonly measured by two consecutive months of economic contraction.
However, in an analysis released by the Reserve Bank this week, it says this definition does have shortcomings, and some economists prefer to gauge the the speed of a deterioration in employment when measuring a downturn.
Australia saw its largest monthly drop in employment by a long way in April, a near 600,000 jobs decline, which saw the unemployment rate jump to 6.2 per cent from 5.2 per cent.
Treasury is still forecasting a 10 per cent jobless rate in the June quarter, a level not seen since the aftermath of the last recession in the early 1990s.
AMP Capital chief economist Shame Oliver says the March quarter result will be a close call and may sneak into positive territory ahead an almost certain contraction in the June quarter.
While this could see Australian avoid a technical recession, "this is all about semantics".
"Whatever way you look at it, it's still a horrible economic disruption," he said in a note to clients on the impact of COVID-19.
Dr Oliver expects the quarter will have seen falls in consumer spending, business investment, housing investment and business inventories more than offsetting small gains in government spending and exports.
Even so, the expected 0.3 per cent contraction in the March quarter would be a small fall compared to the hit seen in most other countries with the US down 1.2 per cent, the Eurozone down 3.8 per cent, Japan down 0.9 per cent and China down two per cent.
Australian Associated Press
