A crash in consumption and business investment will result in the economy contracting 8 per cent in the year to June, the Reserve Bank of Australia says. This, coupled with a 2 per cent drop in the March quarter, means a decline in GDP of about 10 per cent from peak to trough is expected.

The economy will then recover enough to be down 6 per cent by the end of the year, according to the latest central bank forecasts released on Friday.