The German economy, Europe's biggest, has managed to shrug off faster than expected the period of weakness it experienced last year, the German central bank, or Bundesbank, said today.
"The German economy appears to have overcome the phase of weakness that emerged last spring more quickly than many people expected," the Bundesbank wrote in its latest monthly report.
Among the positive factors contributing to this were the "markedly positive consumer climate - on the back of the favourable employment and income outlook - and falling energy prices," the report said.
Business confidence had also improved in December, the Bundesbank said, pointing to the increased industrial output in October and November and a rise in factory orders.
After notching up growth of 0.8% in the first quarter of 2014, German gross domestic product (GDP) contracted by 0.1% in the second quarter and then expanded by a meagre 0.1% in the third quarter.
Fourth-quarter GDP data are not scheduled to be released until mid-February.
But the federal statistics office Destatis calculated in a flash estimate last week that the German economy expanded by 1.5% overall in the whole of 2014, suggesting that growth must have accelerated in the fourth quarter.
The main factors driving the recovery were rising exports, increased consumer and public spending a rebound in investment, Destatis said.
Analysts said that Germany's strong fiscal position, its buoyant labour market, low inflation, the sharp drop in oil prices, the lower euro and the further monetary easing by the European Central Bank would provide plenty of reasons to be optimistic about recovery prospects this year.