Australia will endure its largest economic hit since the onset of the Great Depression, the International Monetary Fund has warned, with unemployment to remain high for at least two more years in the wake of the coronavirus pandemic.

Releasing forecasts for the global economy overnight, the IMF predicts the Australian economy will contract by 6.7 per cent this year, or almost $130 billion. It would be the single largest hit since 1930 when the economy is estimated to have contracted by 9.5 per cent as the Great Depression set in.

While the fund believes the economy will grow by 6.1 per cent in 2021, it would still leave Australian GDP smaller than it was at the end of 2019.

Of the world's 20 largest economies, Australia's performance is forecast to be among the bottom third with countries such as the United States (minus 5.9 per cent), Britain (minus 6.5 per cent) and South Korea (minus 1.2 per cent) all tipped to do better.