The Vietnamese economy is still facing a myriad of challenges, ranging from the large amount of nonperforming debts to the rising number of bankrupt businesses, the government and the Committee of Economic Affairs reported at the National Assembly’s fifth session on Monday.

The first day of the 5^th session was reserved for the NA to listen to reports on socio-economic performance in 2012 and the first four months of this year, which is forecast by both of the reports to remain in a tough spot.

“Although the socio-economic situation posted certain positive signs in the first four months, its development remains slow and unsustainable,” Deputy Prime Minister Nguyen Xuan Phuc said to begin the government’s report.

The economy is still under pressure of high inflation and vulnerable to macro-economic instability, while the lending interest rates remain out of borrowers’ reach, the report said.

Credit growth lagged far behind the 12 percent a year target, and the rate of nonperforming loans remained as high as 7.8 percent by the end of last year, according to figures from the State Bank of Vietnam.

The gold market management system has also failed to mobilize gold from the public to pump into the economy.

The government’s report also pointed out that market consumption remains low and a number of commodities still have high unsold inventory stocks. The number of businesses forced to dissolve or declare bankruptcy continues to rise, while the realty market is still struggling to escape from its frozen state.

“Policies have been issued to help solve the problems, but most of them either lack guidance for implementation or are slowly implemented,” the report concluded.

As for solutions in the near future, Phuc said the government will prioritize pulling down the average lending interest rate and achieve the credit growth target of 12 percent a year.

Chief of the NA’s Committee of Economic Affairs, Nguyen Van Giau, also delivered the committee’s report, which shares many mutual points with that of the government.

“The task to improve the situation in the remaining months of the year is a very tough one,” commented Giau.

As much as 69 percent of businesses nationwide reported losses by the end of 2012, according to the committee.

“The problem is how to ensure that both the targets of boosting GDP growth and combating inflation can be achieved,” Giau said.

The committee thus suggested that fiscal and monetary policies should be released to boost consumption, besides implementing the solutions to support businesses with production and bank loans.