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Ammon News - Ahmad alhyari- The World Bank expects that the current financial surplus of the Social Security Corporation (SCC) will turn into a deficit within 10 years, while it could reach 20 years if the return on investment is taken into account.

This will limit its ability to absorb more government debt, as it will eventually turn into a net seller of government debt, pointing out that the Social Security Investment Fund (SSIF) has become one of the main non-banking entities that hold government debt, especially debt in local currency, the World Bank said in a recently issued report.

The bank also stated that the continued absorption of a large amount of government debt in the future may limit the ability to invest in other asset classes and sectors, which constitutes a challenge to the fund’s goal of maintaining a diversified investment portfolio.

It pointed out that the SSIF's share of public debt gradually increased until it reached about 20% of the total government and guaranteed debt, which is equivalent to about 22.6% of the gross domestic product in 2022.

The pace of the SSIF's purchase of government debt decreased significantly between 2017 and 2020, but it doubled after the pandemic to reach about 30.1% of government debt instruments issued in 2022, the bank noted.

The bank explained also that Treasury bonds in 2021 represented about 54.4% of the SSIF’s total assets, compared to 46.3% in 2016.

Finally, the bank noted that the SSIF's net holdings of debt, as government and guaranteed debt recorded about 88.8% of the gross product in 2022, compared to 75.7% in 2017.