(Yicai Global) Oct. 30 -- Liang Hong Team of China International Capital Corporation Limited [HKG:3908] (CICC) issued its '2018 Macroeconomic Outlook' today, in which the investment banking firm raised China's real GDP growth rate forecast for next year to 6.9 percent despite the current market consensus is 6.4 percent.

The CICC report projects a more optimistic prospect mainly due to growth in public consumption, real estate investment and investment in manufacturing capacity. The report also predicts a real GDP growth rate of 6.8 percent in 2019. The growth rate of nominal GDP is expected to hover above 10 percent in both 2018 and 2019, it says.

The annual consumer price index (CPI) may rise from 1.6 percent in 2017 to 2.5 percent in 2018, while the annual producer price index (PPI) may return to "normalcy" at about 3 percent. CICC believes the monetary policy will continue to become less easing under a macro environment where inflation continues, and real interest rates fall.

CICC also predicts that the yuan-dollar exchange rate will fall from around 6.68 at the end of 2017 to about 6.48 by the end of 2018, based on the judgment that investment return rate in China will keep rising while the dollar may slightly weaken next year.

CICC expects two macro-economic trends next year: domestic and foreign monetary policies will be tightened much harder than expected, and the real estate market will become much cooler than predicted. The CPI inflation in 2018 may be higher than forecast, the report says, which will, in turn, further push down the real interest rate, and encourage consumption and investment.