The Finance Secretary will focus on jobs and growth when he delivers his budget on Thursday.
John Swinney will set out his spending plans for 2013-14 in the face of what he described as the toughest financial settlement from Westminster since devolution.
He has already pledged to make jobs and economic growth priority areas.
There has also been speculation that he will use the budget to end the freeze on public sector pay that was introduced two years ago.
Mr Swinney will unveil his draft budget to Holyrood this afternoon, setting out how he plans to spend £28.4bn.
Adjusted for inflation, the Scottish budget from Westminster is expected to fall by about 11% between 2010-11 and 2014-15, according to a Scottish Government report.
Capital budgets, used to fund larger public infrastructure projects, will be reduced by 33% over the same period.
Mr Swinney said: "At a time when we face significant economic challenges, this Government is focused on jobs, economic growth, protecting public services and supporting Scotland's household budgets.
"The settlement we received in the UK spending review is the toughest since devolution. It will mean that, within four years of this UK Government taking office, we will see an 11% overall reduction to Scotland's budget and our capital budgets cut by a third.
"In delivering this budget, we must meet our commitments to the people of Scotland in the face of declining resources and without the full economic levers of a normal independent government at our disposal."
He insisted that the SNP administration will "continue to use the resources available to us, and the powers at our disposal to deliver growth and jobs".
The Public and Commercial Services union has called on Mr Swinney to use the budget to end the "massively unfair" freeze on public sector wages for those earning more than £21,000 a year.
When he announced his budget for this financial year last September, Mr Swinney said he hoped to be able to do this in 2013-14.
Labour finance spokesman Ken Macintosh urged the Finance Secretary to invest in housing and further education.
The MSP said: "Last year the Scottish Government cut housing and colleges so it should be no surprise to SNP ministers that Scotland is now back in recession with unemployment higher than in the rest of the UK.
"We want to see investment in housing and construction to spark some growth in the Scottish economy and support for further education, not a further kick in the teeth for the young and unemployed.
"John Swinney needs to stop hiding behind Westminster or trying to blame our local authorities and start taking responsibility for his own budget decisions."
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