The Morrison government is poised to break its self-imposed $600 billion debt ceiling as the coronavirus-induced global economic slowdown and cost of the planned stimulus package eradicate promised budget surpluses and push more Australians onto welfare.

As the S&P/ASX200 suffered its largest one-day drop since the start of the global financial crisis, wiping $136.5 billion from the value of major companies, analysts warned the economic fallout from the coronavirus outbreak was growing, with Australia likely to fall into recession.

The federal government's own $600 billion debt cap is set to be lifted as the economy slows from the coronavirus outbreak. Credit:Alex Ellinghausen

One of the biggest hits will be to the federal budget. Ahead of last year's election the government forecast it would show a $7.1 billion surplus, its first surplus in more than a decade.

This was downgraded in the mid-year budget update in December last year but partial figures since then suggest that at the end of January it was $3.7 billion behind where it needed to be to get to surplus, with the full impact of the coronavirus yet to be felt.