George Osborne is to announce a further £4bn of spending cuts by 2020 in this Wednesday's Budget.
The Chancellor will say the cuts are necessary to keep his fiscal plan on course, and enable him to continue to hit a Budget surplus in the final year of this Parliament.
He had anticipated a surplus of £10bn for 2019/20 just four months ago.
But revisions by the Office for Budget Responsibility to the forecast for earnings, the stock market and for low inflation have eaten into that forecast surplus.
The Institute for Fiscal Studies has calculated a £7bn shortfall in tax revenues.
The cuts could come partly from reducing cash totals to departments that anticipated higher inflation, and there could also be some new efficiencies to unprotected government departments.
Mr Osborne said the cuts he was planning were "not a huge amount in the scheme of things".
He told the BBC's Andrew Marr Show: "We need to act now so we don't have to pay later.
"That's why I need to find additional savings equivalent to 50p in every £100 the Government spends by the end of the decade.
"Because we have got to live within our means to stay secure and that's the way we make Britain fit for the future."
The Department for Work and Pensions has already confirmed some further cash-saving reforms to disability benefits.
Asked about claims the Government is facing an £18bn black hole in its finances, he replied: "£18bn is the sum of money that has been revised off our nominal GDP. In other words, that's a number out there last year because inflation was lower.
"It's a real number in the sense that all around the world every Western country, and indeed in big emerging countries like China, Brazil, Russia, people are looking at economic prospects and thinking they are not as rosy as they were just a few months ago."
Former chancellor Ken Clarke suggested Mr Osborne should carry out "tough and difficult" measures now as it was early in the five-year parliamentary cycle.
Mr Clarke told Sky News' Murnaghan programme: "The global economy is certainly slowing down.
"Markets are very jittery and if you look at the biggest problem in the short-term in Britain, it is that we are still running a deficit and we are still piling up debt and that slows down the prospects of growth.
"You've got all the other structural changes we've got to make, all the things we are doing on skills, training, infrastructure spending, trying to rebalance the economy.
"George has got to get on with that and this is the first Budget in a five-year parliament so if I were him, I'd want to do some of the tough and difficult things now."
The shadow Chancellor John McDonnell confirmed on Friday that Labour does not plan to reach an overall surplus under its new Fiscal Credibility Rule, as it will exempt investment spending from its target.
Mr McDonnell has criticised the Chancellor for his lack of investment spending.
Meanwhile, Mr Osborne appeared to indicate the Government may hold back from fuel duty rises in this week's Budget, after pressure from Tory backbenchers.
He also defended the £130m tax deal Google reached with HMRC, which was criticised by MPs for being "disproportionately small".
Mr Osborne said: "I was faced with a situation when I became Chancellor where we were not raising any money from this company.
"We are raising money from Google and indeed, from Facebook and the like. I think that is a success."
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