This chapter assesses Costa Rica’s budgetary governance. Whereas the budget process is well institutionalised and regulated, a number of key challenges have been identified. Challenges include the fact that a large share of the budget falls outside the budgetary process headed by the Ministry of Finance, next to high budget rigidities, a lack of fiscal space and weak fiscal constraints. The chapter formulates recommendations in order to create and ensure fiscal space for government priority spending, align institutionally decentralised institutions with government priorities and ensure fiscal sustainability, allowing the country to finance and implement the priorities set out in the National Development Plan in a sustainable way.