Australia faces stalled population growth and budget deficits until at least 2060 as a result of emergency Covid-19 measures, the government warned.

The decision to slam shut its borders at the start of the pandemic, combined with lower fertility rates, mean slow population growth that will weigh on the economy, according to the 2021 Intergenerational Report.

A vast stimulus spending programme launched last year — which saw the government pump billions into the economy to avert a full-blown depression — will help keep the budget in deficit until at least 2060.

“This outlook has been profoundly affected by the Covid-19 pandemic, which has caused the most severe global economic shock since the Great Depression,” the report says.