The finance minister however noted that the aid spending could rise back to 0.7 percent when fiscal conditions allowed, but did not set a target date.
Sunak confirmed that public sector pay will be frozen this year, with an exception for NHS workers and the lowest paid, while the U.K.'s longstanding target of spending 0.7 percent of GDP on overseas aid will be reduced to 0.5 percent.
While expressing "great respect to those who have argued passionately to retain this target", Sunak said "sticking rigidly" to it "is hard to justify" to people at a time when the economy has been so battered by the coronavirus pandemic.
Rebecca Evans said the £1.3 billion funding increase for the Welsh Government for 2021/22 through the Barnett formula failed to support a "fair recovery" across the UK.On Wednesday, Ms Evans said in a tweet: "The Chancellor has made the wrong choices and broken promises today".
Without giving a timetable, he said that the government aims to return to the target first laid out by the Labour government of Tony Blair in 2004.
The decision goes against the government's promise past year to maintain the aid target and drew sharp criticism from across the political spectrum, including within Prime Minister Boris Johnson's own Conservative Party.
Johnson's government has repeatedly committed to maintaining the spending and his Conservatives made it a key plank of the election manifesto previous year.
Britain will borrow nearly £400 billion (RM2.2 trillion) in the current financial year to pay for the massive coronavirus hit to its economy, Sunak said today.
The review was presented also with Britain yet to strike a post-Brexit trade deal with the European Union ahead of a transition period ending December 31.
"Our health emergency is not yet over and our economic emergency has only just begun", he said.
The British economy is forecast to shrink by 11.3 percent this year, the worst recession in more than 300 years in the country as a result of the coronavirus crisis, British Chancellor of the Exchequer Rishi Sunak said Wednesday.
The chancellor told British lawmakers that the Office of Budget of Responsibility (OBR) did not expect the economy to return to its pre-coronavirus levels until the end of 2022. The agency is predicting growth of 5.5% in 2021 and 6.6% the following year.
The "long-term scarring" would mean that in 2025 the economy will be around 3% smaller than expected in March.
The massive fall in output this year has led to a huge increase in public borrowing as the government sought to cushion the blow and tax revenues fell.
Sunak said the cost of the fight against coronavirus was now 280 billion pounds this year, up from a previous estimate of about 200 billion pounds.
Britain's government is on track to borrow roughly 400 billion pounds ($534 billion) this financial year as it struggles with the social and economic impact of COVID-19, which has killed more than 55,000 people.
He warned that underlying public debt is rising towards 100% of annual GDP.
"High as these costs are, the costs of inaction would have been far higher", he said.
"This situation is clearly unsustainable over the medium term", Mr Sunak admitted.
He described the United Kingdom as facing an "economic emergency" as he confirmed plans to cut worldwide aid and impose a public sector pay freeze for millions.
He said that while the government would give pay rises to more than one million nurses, doctors and others working for the state health service, the offer could not be extended to other public-sector workers.
The pubic sector pay freeze announced by Rishi Sunak will be keenly felt in Wales. A new infrastructure bank will also be headquartered in the north of England.