The Australian Bureau of Statistics reported the economy grew 0.4 percent between April and June compared with the previous quarter, a small increase driven by mining exports and government spending.

"The external sector drove GDP growth this quarter, while growth in the domestic economy remains steady," chief economist Bruce Hockman said.

Australia has avoided recession for almost 28 years but Wednesday's figures will fuel concerns about the economic outlook with growth falling to its lowest levels since the global financial crisis in 2009.

The central bank kept the main interest rate at a record low of 1.00 percent on Tuesday owing to subdued consumer spending and a slump in the housing market.

Analysts believe the bank could further cut rates in the coming months to help boost the economy.

"It is reasonable to expect that an extended period of low interest rates will be required," Reserve Bank of Australia chief Philip Lowe said.

But Prime Minister Scott Morrison was upbeat about the weak data, telling local radio on Wednesday he was confident recent tax cuts would stimulate the economy in the current quarter.