"The authorities should be considering further stimulus that may be needed once existing measures expire at the end of the third quarter 2020. Such support should focus on improving resilience and social and physical infrastructure,including strengthening the social safety net and investing in energy efficiency and social housing."
But the OECD warned that a second wave of the coronavirus would deliver a much deeper hit to the Australian economy.
It said the economy would contract by 6.3 per cent this year,enough to take the economy back to where it was in 2016. It would then grow by just one per cent in 2021.
Unemployment would average 7.6 per cent this year and then 8.8 per cent the following year.
The OECD said due to the high level of debt carried by Australians,a second wave of infections would create"debt-servicing problems"that would then amplify a potential fall in house prices which would ultimately derail any recovery.
Loading
Under that scenario,the federal budget would show a deficit of more than $210 billion and follow that with a $100 billion shortfall in 2021-22.
Globally,the OECD is forecasting the world economy to contract by 6 per cent if there is a single hit from the virus with growth of 5.2 per cent in 2021. But if there is a new wave,then the global economy shrinks by 7.6 per cent this year and grows by just 2.8 per cent next year.
Of the world's major economies only South Korea,India,China and Indonesia are expected to do better than Australia.
The US faces a 7.3 per cent hit,France an 11.4 per cent decline and Britain an 11.5 per cent fall under a single wave scenario.
Treasurer Josh Frydenberg said the country had entered the pandemic in a position of economic strength,which had enabled massive fiscal support to be put in place.
"There is still a long way to go in recovering from this once-in-a-hundred-year global pandemic but we are heading in the right direction and we will continue to do all that is necessary to ensure Australia bounces back stronger on the other side of this crisis,"he said.
The OECD's chief economist,Laurence Boone,said as long as there was no vaccine or treatment for coronavirus,governments and central banks around the world faced a policy tightrope.
He said the main instruments to control the virus were testing,tracking,tracing and insolation and even these may not be enough with the outbreak to ripple through the world economy for the next 10 years.
"Today's recovery policies will shape economic and social prospects in the coming decade,"he said.
"The recovery will not gain steam without more confidence,which will not fully recover without global cooperation. Confidence needs to be boosted both at the national and international levels."
Get our Morning&Evening Edition newsletters