Impact of a Central Provident Fund cut back on housing affordability and cost competitiveness.

Abstract

The chief purpose of this report is to conduct a descriptive study to estimate the impact of a Central Provident Fund (CPF) rate cut on the Singapore economy. Cost-cutting measures adopted by the Government were studied and their impact on three aspects of the Singapore economy projected. The analysis shows that a cut in CPF savings would lead to lower consumption levels and higher voluntary savings. Such a move would also reduce housing affordability.