Economic growth was marginal in the September quarter, which economists say points to a recession in the first half of 2009.
Australian real gross domestic product (GDP) rose by a seasonally adjusted 0.1 per cent in the September quarter, the Australian Bureau of Statistics said.
This compared with an upwardly revised rise of 0.4 per cent in the June quarter.
Over the year to September, GDP rose 1.9 per cent.
The median market forecast was for a rise of 0.2 per cent in the September quarter and of an annual rate of 1.9 per cent.
Non-farm GDP fell by 0.3 per cent.
AMP Capital Investors chief economist Shane Oliver said the Australian economy would have contracted in the September quarter but for the recovering farm sector.
"We're grinding to a halt here," he said.
"The economy has stalled and that's pretty evident when you look at non-farm GDP, which went backwards.
"We can't say the economy is in recession but it's quite close to it and, for most people, it feels that way."
Dr Oliver said the federal government's $10.4 billion fiscal stimulus package, giving handouts to parents and pensioners, would avert a GDP contraction in the December quarter.
But the Australian economy was likely to fall into a mild recession in the first half of 2009, he said, as the global financial crisis restrained consumer spending and exports.
"Some time in 2009, you'll see a couple of negative quarters," Dr Oliver said.
"The global financial crisis has led to a slump in demand for our exports and a slump in commodity prices, therefore our national economy is weakening rapidly.
"There's been a major blow to confidence ... Australians have suffered massive blows to wealth from share market falls.
"These things will be enough to tip us into recession in the first half of next year."
