Germany's Bundesbank raised its forecast for growth of the euro zone's largest economy this year and next on Friday, highlighting the increasing divergence between the currency block's member countries.
The bank said it expects Germany to grow 0.5 percent this year and 1.7 percent next year compared with June-forecasts of 0.3 percent and 1.5 percent respectively.
The bi-annual projections also forecast growth of 2.0 percent in 2015.
Germany has been a major driver of the euro zone recovery, which has lost some of its momentum recently with major economies like France and Italy loosing steam.
The Bundesbank said the improvement was driven mainly by demand at home rather then from abroad, benefiting from low-interest rates and growing incomes.
"The German economy is in good shape: the unemployment rate is low, employment is rising, and wage growth is returning to normal," Bundesbank President Jens Weidmann said.