The former IMF chief and French finance minister also reiterated her longstanding plea for governments to flank the ECB's easy-money policies with fiscal policy, saying "an ambitious and coordinated fiscal stance is critical".
"The euro area is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime," Lagarde said.
ECB economists expect output in the 19-nation currency club to shrink by "five to 12 percent" this year, she added, saying the size of the contraction will depend on the duration of the confinement measures aimed at curbing the outbreak and the policy responses.
"As containment measures are gradually lifted, these scenarios foresee a recovery in economic activity although its speed and scale remain highly uncertain," Lagarde said.
The grim tone came after Eurostat figures on Thursday showed that the locked-down eurozone economy was estimated to have shrunk by 3.8 percent in the first quarter.
Further highlighting how much damage the pandemic has already done to the global economy, Germany announced that its jobless total soared to 2.6 million in April from 2.3 million the month before and France confirmed that it had plunged into recession.
Lagarde said a "sharp downturn in economic activity in April suggests that the impact is likely to be even more severe in the second quarter," with output possibly shrinking 15 percent.
"In the last six weeks, the ECB has been very successful in stopping panic on financial markets and stabilising banks," economist Marcel Fratzscher of the Berlin-based DIW think-tank commented.
"Unfortunately the ECB's success has taken the pressure off politicians to swiftly implement the necessary European solutions" on the fiscal side, Fratzscher added.
Like the US Federal Reserve and other central banks around the world, the ECB has unveiled massive stimulus in recent weeks to shore up the economy and keep credit flowing. That includes the 750-billion-euro PEPP, set to bring the ECB's total asset purchases to around 1.1 trillion euros ($1.2 trillion) this year.
Lagarde called the scheme "the best tool we have in our toolbox," saying governors are ready to "adjust the size and composition" of the scheme if needed.