Australia's population is smaller and older than previously projected as a result of the Covid-19 pandemic.

According to the data released on Wednesday from the government's annual population report, the Australian population grew by just 0.1 per cent, or 33,000 people, in the first full financial year of Covid-19, Xinhua news agency reported.

The Centre for Population now projects the population will grow to 26.3 million by the end of financial year 2022-23, down 600,000 from pre-pandemic expectations.

Australia's population is now on track to hit 29.9 million in 2032-33, two years later than previously projected, while the median age of Australians will be 40.1 years.

Treasurer Jim Chalmers said news that the population would be smaller and older was concerning.

"As the economy recovers from the worst of the pandemic, crippling skills and labor shortages are holding our businesses and our economy back," he was quoted as saying by the Australian Associated Press on Wednesday.

As a result, Australia will likely become more reliant on migrants to fill work shortages.

In 2022 the newly-elected government agreed to increase the annual migrant intake from 160,000 to 195,000 and is now undertaking a review of the immigration system.

Chalmers said well-managed immigration policy is key to Australia's future economic development but is not a substitute for training local workers.

(KB/IANS)