GRIM findings from the Scottish Fiscal Commission’s first medium term financial strategy suggest Scotland’s economy could be set for five more years of “subdued” growth.

The independent commission, who have a legal duty to set out two sets of forecasts a year, revised down estimates made last December, saying GDP will be unlikely to pass 1% in the years to 2023.

The December forecast of 0.9% next year was revised down to 0.8%.

Commission chair Susan Rice said modest population and productivity growth were the drivers of slow growth, while continuing weakness in wage growth – with real wages anticipated to fall by 0.5% during 2018 – had fed through to income tax.

The forecast income tax take for 2018-19 has been revised downward by a staggering £209 million, or 1.7%.

Finance Minister Derek Mackay said the miserable forecasts were the consequence of £2.6 billion worth of cuts to Scotland’s budget by the UK government.

He told MSPs: “This strategy clearly lays out the consequences of UK choices on Scotland’s public finances, including UK imposed decisions on austerity, immigration policies that don’t suit Scotland, and taking us out of the single market through Brexit.

“We will always deliver responsible government and balance the books, and I challenge the Chancellor to change course.”

One of the most startling tables in the report was around the size of the population aged 16 to 64, the working-age population, who generate the highest tax receipts.

While the total number of people living in Scotland is expected to grow, the number of people aged 16 to 64 is expected to start to shrink from 2018 onwards, while the older population increases.

This is in contrast to a growing 16 to 64 population in the UK and will, the Commissioners say, place a “particular drag on growth in GDP in Scotland”.

The Scottish Fiscal Commission said that “when the effects of population growth are stripped out, Scottish growth is much closer to UK growth”.

Mackay said this proved the case for devolving greater control over immigration to Holyrood.

It wasn’t all bad news. LBTT and landfill tax forecasts have been revised up. The forecast for LBTT is up £26m (4.4%), whilst the landfill tax forecast is up £8m (7.6%).

But as well as change to income tax predictions, there were downward revisions in non-domestic rates and air-passenger duty, which would see £220m less in tax this year, £300m less in 2019-2020, £344m less in 2020-20221, £395m in 2021-2022 and £449m in 2022 -2023.

The Scottish Tories said the report “damning evidence” that the SNP “is unfit to run Scotland’s economy”.

Murdo Fraser said: “The consequences of tax hikes, poor growth and low productivity look set to cost public finances hundreds of millions of pounds.

“Not only is this bleak news for the future, it also leaves an immediate hole in Scotland’s budget of more than £200m. Unless the SNP government sorts this out, the consequences could be even deeper cuts to public services.”

Green MSP Patrick Harvie said both Scotland’s government needed to do better: “UK austerity has had a terrible impact on Scottish public finances but the Scottish Government has chosen to bind the hands of local government when it could devolve tax powers to help our councils protect services and jobs. Just a few weeks ago, SNP MSPs sided with the Conservatives to reject the Greens’ call to scrap the unfair and outdated Council Tax.”

Scottish Labour’s finance spokesperson James Kelly said the forecast was a result of the SNP’s “timidity”.

Lib Dem chief Willie Rennie called it a “clear failure of the Scottish Government to boost the economy after ten years in government”.