Interest rate increases later this year, the Australian dollar at US70 cents by the end of the year and US68 cents next year, and an overall 10-15 per cent drop in commodity prices within 18 months. That was the bad news ANZ chief economist Saul Eslake delivered to Finance and Treasury Association/Finisia members this week. He predicted the Reserve Bank would increase cash rates to 5.75 per cent during the September quarter at the latest. Winners for the year ahead would include exporters, particularly those in the resources sector and businesses assisting it, and its related infrastructure expansion, such as engineers and those in non-residential construction. “In this regard, Western Australia and the Northern Territory will be the clear winners, and to a lesser extent, Queensland,” Mr Eslake said. Other winners would be those who borrowed at fixed rates and had begun to diversify their assets offshore, all who would benefit from the predicted exchange rate decline, he said. Losers would include: retailers with exposure to discretionary goods and services; importers, particularly those unhedged and paying in Japanese yen and euros; and businesses vulnerable to low-cost competition from Asia.