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HANOI, Oct. 5 (Xinhua) -- The World Bank said Wednesday that it maintained the forecast for Vietnam's gross domestic product (GDP) growth at 6 percent for 2016.

Economic activity in Vietnam moderated in the first half of 2016, due to the impact of a severe drought on agricultural production and slower industrial growth, the bank said at the launch of its East Asia and Pacific Economic Update.

Vietnam saw slower GDP growth of 5.5 percent in the first half of 2016, compared to 6.3 percent during the same period last year.

While the broad poverty reduction trend continues, the contraction in agriculture poses short term risks to livelihoods, in particular among poor households which rely predominantly on farm income, said the World Bank.

Vietnam is facing some downside risks including slowing exports, accumulated fiscal imbalances and lingering non-performing loans problems, the bank said.

Specifically, the country's exports slowed to 6.4 percent year-on-year in the first eight months this year. Although the figure is still far above global trade growth, this is the lowest level for Vietnam since 2009, said the World Bank.

This is mainly due to declining oil exports and slower growth of manufacturing exports following weaker external demand, assessed the bank, warning that further weakening of external markets could dim Vietnam's export performance.

In addition, a fiscal deficit of about six percent of GDP in 2015 push Vietnam's public debt to an estimated 62.2 percent of GDP, nearly 11 percentage points higher than in 2010 and inching quickly toward the legally-mandated ceiling of 65 percent of GDP. Fiscal outturns in the first half of 2016 suggested that budget pressures persist, as lower oil prices and weaker economic activity weigh on revenue performance.

At the same time, slow progress in implementing structural reforms to boost productivity could dampen medium-term growth, while delays in addressing lingering non-performing loans problems and fiscal consolidation could pose risks to future macro-economic stability and growth.

The World Bank called for a bolder implementation of structural, fiscal and banking sector reforms which would help to mitigate macro-economic vulnerabilities and sustain higher medium-term growth.

In late September, the Asian Development Bank also forecast Vietnam's economic growth at 6 percent in 2016 due to contractions in the agriculture and mining sectors in the first half of the year.

In early October, Vietnamese Prime Minister Nguyen Xuan Phuc lowered the country's economic growth target to 6.3-6.5 percent in 2016, down from the earlier target of 6.7 percent.
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