In its latest monetary policy report published on Tuesday, Russia’s central bank says that the nation’s GDP grew by 5.1% year-over-year for the third quarter of the year.

The regulator said that according to its estimates, the nation’s economy has grown significantly, both in the second quarter, where it grew 4.9%, and now in the third quarter, leading the central bank to increase its forecast for the year’s growth to 2.2-2.7%.

Elvira Nabiullina, the current head of the Central Bank of Russia, said in the report, “According to our estimates and current data on economic activity, GDP growth in the third quarter exceeded expectations. The main driver was investment demand, which was largely fueled by budget expenditures.” She noted domestic demand was strong, and the manufacturing industries were showing robust growth, both of which were contributing to the increase in the GDP.

Nabiullina added, “The increase in companies’ own funds, along with budget expenditures and credit growth, allowed businesses to expand investment plans. According to enterprise monitoring data, companies in recent months have become even more optimistic about future investments in expanding production.”

The Western powers have imposed an unprecedented raft of economic sanctions on Russia over the conflict in Ukraine. The sanctions have prevented Russia from conducting international trade in dollars and euros, and have shut the nation out of the Western banking system. Due to this, in 2022, the nation’s GDP fell by 2.1%.

However the new data shows that the Russian economy has adapted to the new conditions, and has resumed growing. In September, President Vladimir Putin noted that the GDP had already returned to the same level it had been at in 2021, prior to the imposition of Western sanctions.