An independent study commissioned by Transport Scotland and the Borders Railway Blueprint Group shows the 30-mile railway is attracting tourists, homeowners and workers to the region.
The report also confirms that the £350m track is continuing to prove popular among Borderers, with passenger numbers for Tweedbank, Galashiels and Stow train stations all being higher than predicted.
Mid Berwickshire councillor Mark Rowley, Scottish Borders Council’s executive member for economic development, said: “This report is further proof that the railway is having a hugely positive impact on the Borders.
“The study shows the railway was a key factor for many tourists choosing to visit the Borders, while more local people are using the service than predicted for work, leisure and education.
“There is also evidence of the railway positively impacting on people’s choice of where to live.
“While these figures are encouraging, there are still improvements which can be made, and the council will continue to work with partners in the Borders Railway Blueprint Group to deliver a range of economic benefits.
“This includes encouraging businesses to take advantage of the many development opportunities available in the region which have been opened up to a greater audience by the railway.
“Now we have started to see tangible benefits to some parts of the Borders from the railway, it is vital we now explore if we can extend these benefits to other areas, such as Hawick and beyond.
“Extended rail could be a huge boost here, so we welcome Transport Scotland’s feasibility study into extending the line to Carlisle ,and we will work hard to develop the strongest possible case for expansion.”
The report, based on a survey of more than 1,300 people in November and December, was carried out by Peter Brett Associates to assess the success of the Edinburgh-Tweedbank line a year on from its opening in September 2015.
It reveals that almost two-thirds of tourists questioned cited the rail line as a factor in their decision to make their trip and nearly a quarter stated that they would not have made the trip were it not for the line.
Passenger numbers are higher than forecast at all Borders stations and lower than predicted at all Midlothian stations, it reports.
Scottish Government transport minister Humza Yousaf said: “The reopening of the Borders Railway was a momentous occasion for residents along its route, bringing with it economic, education and employment opportunities.
“This independent report provides solid evidence that the communities along the line are beginning to feel the benefit of our investment.
“The route’s popularity was already undisputed, and we will continue to work with all the blueprint group members to ensure that it continues to act as a catalyst for further social and economic regeneration.”
Danny Cusick, chairman of the blueprint group, said: “This has been a very thorough study, and it provides us with valuable insights into how the line is helping the whole region.
“There’s also a lot we can learn as we progress our shared efforts to maximise the economic, environmental and social benefits of the line.
“We are determined to build on this success further in coming years to establish the Borders Railway region as an excellent location for business, living, leisure and learning.”
Malcolm Roughead, chief executive of VisitScotland, added: “From breathtaking historic attractions to unique shops, accommodation and eateries, visitors have been hopping on board the Borders Railway in their thousands to experience all that Edinburgh, Midlothian and the Scottish Borders have to offer.
“The fact that nearly a quarter of tourists surveyed said they wouldn’t have visited the Scottish Borders if the line hadn’t reopened demonstrates exactly why the Borders Railway has been such great news for tourism.
“Scotland’s reputation as a quality destination relies on continued investment and innovation to ensure that current provision meets future demand, and the success of the Borders Railway shows just how important this is.
“It has had a massive impact on the local economy since it was reopened and has helped to shine a global spotlight on all the regions it serves.”
The new report follows Transport Scotland’s announcement in April that extending the Borders Railway by 56 miles into Cumbria will be one of the options considered by an ongoing study looking at improving transport provision in the south of the country.