New Deputy First Minister Jenny Gilruth has admitted there will "undoubtedly" be cuts as the Scottish government faces a forecast shortfall of almost £5billion by 2030.
Gilruth, who last week was appointed Deputy First Minister and Finance Secretary, said the Scottish government had been "very upfront" about challenges, and would look at public sector reform while "protecting services and frontline workers".
It comes after Scotland's auditor general previously warned ministers had no clear plan to tackle a funding gap of £4.7billion by 2029-30.
Asked by the BBC if the Scottish government will have to make cuts, Gilruth replied: "Undoubtedly."
Gilruth said she would work alongside the new minister for public sector reform Ivan McKee to "drive efficiencies", adding that McKee's work will be "pivotal".
She also told the BBC there was agreement across all parties that the number of public sector bodies should be lowered.
She said: "We have seen a growing public sector during the pandemic, that has brought with it additional costs, and in the same time period wages have increased.
"People will know costs are going through the roof just now - the price of energy, the price of the food shop - and we need to keep pace with that and that's why we delivered record public sector pay deals.
"But that has come with additional cost to the government."