China's GDP growth in 2016 is forecast to slow to 6.6 percent to 6.8 percent from 7 percent this year, the Chinese Academy of Social Sciences said.

The consumer price index growth next year will strengthen to 2.1 percent, while the drop in the producer price index will moderate to 3.7 percent, the academy said. Fixed-asset investment growth was forecast to soften a bit to 9.7 percent. The academy's forecast was among the most optimistic outlooks so far for the upcoming year.

CASS recommended an accommodative monetary policy, including more reserve requirement ratio cuts, to counter the slowdown. It forecast the fiscal deficit to widen to 2.12 trillion yuan ($330 billion), up from 1.62 trillion yuan in 2015.

The report predicted a "slow bull run" for next year's equity market, with the Shanghai Composite Index fluctuating between 3,200 to 4,000.