People crossing the borders are normally a good indicator of the economic development in Russia. From St. Petersburg region, the number of border crossings over to southern Finland has fallen sharply over the last few months. Not so in the north.
At the Borisoglebsk, Storskog border check-point, the northernmost land border between Russia and Western Europe, 26,789 crossings were counted in June. That is up 2,405 compared with June 2013.
In total, 161,727 border crossings are counted so far this year, a nine percent increase compared with first half of last year, shows the statistics given to BarentsObserver by the local police in Kirkenes, responsible for immigration control.
The majority of people crossing are Russians aiming at shopping in the Norwegian border town of Kirkenes, a four hour drive from Murmansk.
The International Monetary Fund’s economic health check of Russia, published on Monday, is not good reading for those investing in long-term border trade or other businesses linking northern Norway with Russia’s Kola Peninsula.
The country’s economy continues its slow pace of growth, reflecting pre-existing structural problems and the fallout of geopolitical tensions with Ukraine.
IMF’s mission chief Antonio Spilimbergo says the Ukrainian crises has led to capital outflows increased significantly and bond issuances by the government and Russian companies declined sharply, while borrowing rates increased markedly and the stock market declined.
Capital outflows could reach $100 billion in 2014, proving the uncertainty of doing business in Russia. This has a chilling effect on investments, reads the IMF survey. Eventually, a slowdown in economy increases unemployment, could trigger inflation and unstable ruble; resulting in less to spend and more expensive commodities across the border.
