Germany’s economy ministry increased its forecast by half a percentage point.
Yet while some economists think growth will be close to last year’s 3.6 per cent expansion, the ministry lowered its forecasts for exports and imports -- and said global trade, including protectionism, posed the main risks to the outlook.
Growth, nonetheless, should still be strong, they said.
“The German pick-up is extra large. Now we have to make sure it is extra long,” said economy minister Rainer Bruederle. “The time of nerve wracking stop and go is over.”
The forecast follows another week of strong economic data for the core Eurozone state.
Confidence among German investors soared to its highest rate since July, according to survey results published on Tuesday.
The Zew index rose to 15.4, from 4.3 in December, with half of all surveyed investors expecting a Eurozone interest rate hike within six months.
The week began with the Bundesbank confirming “strong” manufacturing orders towards the end of last year.
However, the Bundesbank expects overall economic growth to slow in Germany this year, forecasting a two per cent increase.