The government had previously said it expected the economy to contract by as much as 8.9% this year in a worst-case scenario without stimulus.
However, growth has been fragile and COVID-19 has hit the economy hard, amid low oil prices.
The third-quarter 2020 real GDP shrank for a second consecutive quarter by 3.62%, said the National Bureau of Statistics (NBS) said Saturday.
NBS said the GDP recorded a growth rate of -3.62% year-on-year in real terms in the third quarter of 2020.
Real growth for the oil sector contracted at 13.89 percent in Q3 - indicating a sharp contraction of 20.38 percent points relative to the rate recorded in the corresponding quarter of 2019.
"As these restrictions were lifted, businesses re-opened and global travel and trading activities resumed, some economic activities have returned to positive growth", it said.
The Q3 aggregate GDP stood at N39,089,460.61 million in nominal terms.
For the first time in more than three years, the Nigerian economy shrank in the second quarter of this year as the GDP fell by 6.10 per cent, compared with a growth of 1.87 per cent in Q1.
The oil sector contributed 8.73 percent to total real GDP in Q3, down from 9.77 percent and 8.93 percent, respectively, recorded in the corresponding period of 2019 and the preceding Q2 2020.
The agriculture sector continued on its positive growth at 1.39 percent, a drop from 1.58 percent recorded in the second quarter.
A professor of Capital Market in Nasarawa State University, Keffi, Uche Uwaleke, said that although Nigeria has plunged into recession, the Q3 real GDP number is better than the Q2 result which was -6.10 per cent.
According to the numbers contained in the report, oil GDP contracted by -13.89 per cent from -6.63 per cent in the second quarter of this year and 6.49 per cent in Q3 2019.The country's non-Oil GDP contracted -2.51 per cent from -6.05 per cent in Q2 2020 and 1.85 per cent in Q3 2019 Information & Communication under Services GDP grew 14.56 per cent compared to 16.52 per cent in Q2 2020 and 9.88 per cent in Q3 2019.
The construction sector grew by 2.84 percent in Q3 2020 from a contraction of 31.77 percent in Q2 2020 and 2.37 percent in Q3 2019.
However, crude petroleum and natural gas was the main contributor to the sector, accounting for 93.10 per cent of total sector output in Q3 2020.
Compared to real growth rates recorded in the same quarter of 2019 and the second quarter of 2020, this was lower by -19.41 per cent and -6.62 per cent respectively.
'However, the performance of the agriculture sector in real terms which came in at 1.39 per cent was disappointing.
In real terms, the non-oil sector contributed 91.27 percent to the nation's GDP in the third quarter, higher than its share in the third quarter of 2019 (90.23 percent) and Q2 (91.07 percent). Of the 13 activities that make up the sector, four sub-sectors recorded positive growth. Telecoms real GDP grew by 17.36 per cent compared to 18.1 per cent in Q2 2020 and 11.3 per cent in Q3 2019.