Official figures show that the German economy grew by 0.9% in the fourth quarter of last year, up from 0.8% in the preceding three months.
The unexpectedly strong performance in the last three months of 2006 meant that growth for the whole of last year was revised upwards to 2.7% from a previous estimate of 2.5%, the federal statistics office Destatis said in a statement.
'Growth impulses came from both inside and outside Germany,' Destatis said. It said 'extremely dynamic foreign trade' made the bigger contribution to the economic recovery, but increased consumer spending and rising investment also helped.
Separate figures showed that investor confidence in Germany continued to bounce back from recent lows this month as the negative effects of higher VAT proved to be only temporary.
The ZEW economic research institute's economic expectations index, based on a poll of 309 analysts and institutional investors, rose by 6.5 points to plus 2.9 points in February. Analysts had expected a slightly stronger rise, however.
