Reserve Bank governor Philip Lowe has warned climate change will have a "profound" impact on the economy and leave businesses with stranded assets while urging governments to borrow more to boost productivity and protect it from a warming environment.

As economists warned the country faced its first quarter of negative growth in nine years due to the combined impact of the coronavirus and the summer's bushfires, Dr Lowe used his first public address of the year to urge more investment to deliver "strong and consistent growth" rather than relying on the nation's fundamentals to get by.

RBA governor Philip Lowe says business and government should borrow more to invest in productivity-enhancing projects including ways to deal with climate change. Credit:AFR

The bank kept official interest rates at an equal record low of 0.75 per cent at its February board meeting on Tuesday, tipping the economy to grow 2.75 per cent this year despite the impact of the bushfires and the outbreak of coronavirus.

Dr Lowe said the bank believed the fires would likely cut GDP across the December and March quarters by 0.2 percentage points while the drought would hurt growth by 0.25 per cent through the year. It was too early to determine the full impact of the coronavirus.