The BBC is facing "enormous challenges" due to high inflation and changes to the licence fee.
Tim Davie, the Director General, told the Commons' Public Accounts Committee (PAC) that the corporation "welcomes" the Government's decision to lower the rate of inflation for funding.
He said: "You've got the financial settlement, which was two years flat, four years CPI (a rate of inflation).We can talk about the joys of quite high inflation in year two and the additional pressures that we've got at the BBC, like many organisations and businesses to be fair but this does put enormous challenges."
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Mr Davie also said that the corporation will consider whether there should be changes to the licence fee this year, as the Government reviews the current funding model. The BBC is currently trying to find £500 million in annual savings due to the licence fee freeze at £159 a year.
The BBC licence fee is set to rise in April, to £169.50 a year, less than what was originally thought. The corporation previously said this would "require further changes on top of the major savings that we are already delivering".
The corporation has been making efforts to cut costs, which include moving several World Service TV and radio broadcast services online, merging the domestic and global news channels, and cancelling the soap opera Doctors later this year due to the high cost of drama production.
Earlier this year, in January, it was announced that a deal had been made to sell the famous BBC Elstree Centre, which is home to the set of EastEnders.
The Public Accounts Committee (PAC) is also expected to question the BBC about its spending plans. The broadcaster intends to spend
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