An escalating trade war between China and the US and decelerating global industrial production will inevitably come down on Finland’s economic growth, says Finland's Varma President and CEO Risto Murto.

Speaking at the publication of the company's half year results, Murto noted that the US–China trade war, which has lasted more than a year, is escalating and it is affecting the real economy.

"For Finland, the threat is that the tense situation will have long-lasting impacts. An escalating trade war and decelerating global industrial production will inevitably come down on Finland’s economic growth. At the same time, the revitalising power of a low-interest economy will weaken,” Murto says in a press statement.

During the first half of this year, Varma's investments pulled in a return of 6.9 percent and assets reached EUR 46.5bn.

 “After a strong first quarter, the return development was more moderate in the second quarter," says Varma Deputy CEO and Chief Investment Officer Reima Rytsölä.

"A key factor for the good return development was a change in direction by the central banks towards lighter monetary policy,” Rytsölä adds.

Over the first half, Varma's equity investments yielded a return of 12.5 percent. Fixed income investments pulled in a return of 3.5 percent and private equity 4.5 percent. Hedge fund and real estate investments yielded a return of 3.1 percent and 1.9 percent, respectively. Over the first half, exposure to fixed income went down from 30.7 percent at the end of 2018 to 28.6 percent and exposure to equities increased from 40.7 percent to 43.5 percent.