Germany's economy will grow by 1.2% in 2010, the government has said, lifting an earlier forecast of 0.5% in April.
The government of Europe's biggest economy was also much more bullish on output this year, saying it would contract by 5%, compared to the 6% contraction it forecast in April.
‘We have a good chance of consolidating this upward trend next year,’ said Economy Minister Karl-Theodor zu Guttenberg in a statement.
The German economy reached its lowest point during the summer and is now climbing out of the trough, he added.
Germany, one of the world's leading exporters, saw its economy fall into a tailspin earlier this year as demand for its goods abroad plunged amid the global financial crisis.
But as the world began to haul itself back onto its feet, Germany has also recovered quicker than most, spurred by improving exports and huge injections of cash, some €80 billion, from the government.
The International Monetary Fund also hiked its forecast for Germany earlier this month, predicting 2010 output of 0.3%.
The European Commission has also revised higher its view of its leading economy.
The improved economic figures should have a knock-on effect on the jobless data, the government said, with an average of 4.1m people unemployed in 2010, many fewer than feared at the height of the crisis.
The improved economic outlook takes place against a backdrop of intense and tricky negotiations between Chancellor Angela Merkel and her new coalition partners, the pro-business Free Democrats (FDP), on future economic policy.
