KEY ISSUESContext. Guatemala's economy has performed solidly since the 2008-09 crisis. Output has converged to potential, inflation is under control, and macroeconomic policies remain prudent. However, risks to the outlook are tilted downwards, while buffers are modest and space for counter-cyclical policies is thin. Long-term inclusive growth is constrained by low investment in physical and human capital, institutional weaknesses, and lack of security.Near-term policies are broadly appropriate. With the output gap closed, the broadly neutral fiscal stance is adequate. The monetary stance is s