The International Monetary Fund is warning Australia's economy will shrink a massive 6.7 per cent this year due to coronavirus containment measures slamming business activity and inflicting the world's worst economic downturn since the Great Depression of the 1930s.

After the sharp recession, the IMF predicts a V-shaped rebound of 6.1 per cent next year if the global pandemic peaks in the next three months and social distancing restrictions ease in the second half of this year.