Germany has raised its growth forecast for 2011 to 2.3%, with the previously sluggish domestic demand expected to pick up.
The Economy Ministry had previously forecast growth of about 1.8%.
Economy minister Rainer Bruederle said Germany's economy had "achieved the comeback of the year in 2010", adding that 2011 would be "a good year".
Berlin predicts growth in private consumption of 1.6% this year, after increasing 0.5% in 2010.
The economy grew by 3.6% last year, its fastest pace since reunification.
Germany is the world's second largest exporter after China and was buoyed last year by a boost in demand for its products as the global economy recovered.
Its strong recovery has made it the main source of growth in the eurozone, as several other countries in the currency bloc have been struggling to meet their debts.