The widely expected result is in line with earlier government predictions that gross domestic product would contract 7 per cent in April-June.

“The June quarter saw a significant contraction in household spending on services as households altered their behaviour and restrictions were put in place to contain the spread of the coronavirus,” Smedes said.

Hours worked fell almost 10 per cent while cash payments of social benefits rose more than 40 per cent, both records for the country.

Trade also took a hit during the quarter, with imports of goods down 2.4 per cent and exports of services dropping 18.4 per cent, the bureau’s figures showed.

The government has stumped up tens of billions of dollars to fight the economic fallout from pandemic. Australia’s forced shutdown earlier in the year crippled the economy and a current lockdown of 5 million people in Melbourne has compounded its problems.

The country was already reeling from a prolonged drought and massive bush fires that had rattled the economy before the disease struck.

Coronavirus leaves Australian economy facing first recession in 30 years

Australia has now confirmed almost 26,000 cases of Covid-19 and 663 deaths from the virus, the vast majority in Melbourne and its surrounds since July.

The government in July predicted a return to growth in the third quarter as virus restrictions eased. But the closure of non-essential businesses in Melbourne, the country’s second-biggest city, could stifle the recovery.

Authorities expect national unemployment to peak at 9.3 per cent in December and the budget deficit to blow out to almost a tenth of GDP by mid-2021.