The GDP outlook was included in a new estimate filed with the European Commission, Finance Minister Nadia Calvino told a news conference.
This compares to two percent growth recorded last year.
Unemployment would jump to 19 percent from 13.8 percent at the end of 2019, Calvino said.
As fiscal income shrinks and Spain boosts spending to help the economy get through the crisis, the budget deficit will increase to 10.34 percent of GDP this year, Budget Minister Maria Jesus Montero said.
The deficit, which had been 2.8 percent of GDP in 2019, was on target this year to become “the biggest deficit since 2012”, she said.
Eurozone rules require members to keep annual deficits to below three percent of GDP.
On Thursday, Spain reported a contraction of 5.2 percent in growth in the first quarter as the coronavirus lockdown paralysed businesses.
Spain — the eurozone's fourth largest economy — had been one of Europe's top economic performers since emerging from a five-year slump in 2013.