The budget will face immediate opposition from angry Portuguese, who plan to march on parliament to demand the resignation of the government and an end to austerity, which has sent Portugal into its worst recession since the 1970s.
The 2013 budget is set to introduce sharp income tax hikes, which could amount to up to two or three months' wages for middle income workers, to ensure the country meets its budget goals under the bailout. Finance Minister Vitor Gaspar has described the planned tax increases as "enormous".
Economists fear the tough measures, which will also include pension cuts, a financial transaction tax and higher property taxes, could push Portugal into a recessive spiral like Greece, further undermining Europe's German-inspired austerity drive for the euro's highly-indebted countries.
Even Portugal's conservative president, Anibal Cavaco Silva, criticised the budget measure. "In the current circumstances, it is not correct to demand of a country being subjected to a budget adjustment process that it meets the targets at any cost," Cavaco Silva wrote on his Facebook page.
Before September, Portugal had shown a relatively high level of political consensus and support for cutting costs and the bailout it sought in 2011. But that support has been eroded, with the main opposition Socialists now pledging to vote against the budget when it is put to parliament at the end of the month.
Local media reported that the government was still locked in an internal debate at the weekend on the possibility of finding more areas for spending cuts in order to ease the tax hikes. The budget is expected to be detailed on Monday afternoon.
The ruling centre-right Social Democrats hold a comfortable majority in parliament together with their smaller allies, the rightist CDS. But the CDS has a long history of opposing higher taxes and analysts say the party's complete support of the government can no longer be taken for granted, especially if the economy deteriorates further.
Protests have now become frequent, though still peaceful. A general strike is planned for November 14.