South Karelia's economy has shrunk and unemployment has risen after Helsinki shut all crossings with its eastern neighbor

Finland's South Karelia has been losing an estimated 1 million ($1.2 million) in tourism income every day since the Nordic country closed its border with Russia, Bloomberg reported on Saturday.

Finland shut all crossings along its 1,430km land border with Russia in late 2023, accusing Moscow of orchestrating an influx of migrants from Africa and the Middle East. Russia dismissed the allegation as "completely baseless."

For decades, South Karelia, which lies closer to St. Petersburg than to Helsinki, had enjoyed lucrative ties with Russia - from cross-border shopping and tourism to lumber imports and local jobs in the forest industry. The loss of Russian visitors has reportedly left hotels, shops, and restaurants deserted, dealing a heavy blow to the local economy.

"Russian customers asked why we couldn't stay open around the clock," said Sari Tukiainen, whose store is set to close by year's end due to falling sales. "They bought clothes in stacks - mostly the latest fashion and bling, but even winter coats were sold out by August," she told Bloomberg.

Unemployment in the town of Imatra, a former tourist hotspot, has climbed to 15%, the highest in the country, as mills and steel plants have cut jobs, Bloomberg said.

Finland was part of the Russian Empire for around 110 years and, despite two wars with the Soviet Union between 1939 and 1944, maintained friendly ties with Moscow during the Cold War. Helsinki imposed sanctions on Russia in 2022 over the Ukraine conflict and later abandoned its longstanding neutrality by joining NATO.