Treasurer Josh Frydenberg has warned it is a "line ball" call whether or not the Australian economy sinks into its second recession in as many years.
The June quarter national accounts are due on Wednesday, which economists expect will show only a modest economic expansion, with the risk of a flat or even a negative result.
This comes ahead of an anticipated hefty contraction of as much as four per cent in the September quarter as a result of lengthy lockdowns in NSW and Victoria and snap closures in other jurisdictions.
Two consecutive quarters of contraction constitute a technical recession.
Asked on the Nine Network whether Australia is heading into a recession, Mr Frydenberg said the median market expectation for the June quarter was for a slight increase in economic growth.
"It will be line ball. Our economy faces some very challenging days ahead," Mr Frydenberg said.
"The lockdowns in our two biggest states are not only costing jobs, seeing businesses close, they are increasing our debt burden as well and having a toll on people's mental health."
He again urged the states and territories to stick to the national plan that will start to see restrictions ease once the vaccination rate hits 70 per cent for double-dosed Australians aged 16 and above.
The fully vaccinated rate currently sits at 34.4 per cent.
Even so, businesses went into the expected economic downturn flush with cash in the June quarter, scoring record profits of $118 billion.
The Australian Bureau of Statistics said gross operating company profits jumped 7.1 per cent in the June quarter, well above the 2.5 per cent gain expected by economists.
While this bodes well for the June quarter national accounts - along with a two per cent rise in the company wage bill - business inventories were meagre.
Inventories - stock on shelves and in warehouses - grew by a weaker-than-expected 0.2 per cent in the June quarter, a potential 0.6-0.7 percentage point drag on the economic growth result.
Before Monday's data, economists' forecasts had centred on a 0.5 per cent expansion in the June quarter, a marked slowdown after the rapid recovery from last year's recession seen in the previous three quarters.
"The June quarter featured lockdowns in Victoria, the start of the lockdown in NSW late in the quarter and mini lockdowns elsewhere," St George Economics chief economist Besa Deda said.
"It means there is a high degree of variability attached to the GDP forecast - so much so that there is a tiny risk of a small contraction in the June quarter occurring."
Economists at Barclays Research are sticking with their forecast of 0.2 per cent growth in the quarter.
"We think a weaker outlook for inventories will offset the effect of higher operating profits on headline growth," they said in a note to clients.
Economists will finalise their June quarter forecasts after international trade and government finance figures are released on Tuesday.