Recent economic developments provide the backdrop against which Australia's economic prospects in 1984 are examined. Factors which will contribute to a mild recovery are identified. It is argued that the fiscal stimulus of the 1983 budget could, via the discretionary component, have been even larger without causing a serious monetary or balance of payments problem. This view partly rests on the maintenance of the prices and incomes Accord which, it is suggested, will need to be reinforced by changes to taxation scales in 1984. However, even if employment grows strongly, unemployment will remain at high levels in 1984.