Germany's Ifo institute has revised up its expectations for growth in Europe's largest economy this year due to strong private consumption supported by record-low unemployment.
The Munich-based institute said it expected the German economy to expand by 1.9% this year from a previous forecast of 1.5% in December. For 2016, Ifo is forecasting growth of 1.8%.
"The German economy is experiencing a strong upswing at present," Ifo economist Timo Wollmershaeuser said in a statement.
"Private consumption remains the pillar of the upswing, since private households' income expectations are good due to the improved situation on the labour market," the economist added.
Ifo's growth forecast is slightly more optimistic than the German government which expects domestic demand to drive a 1.8% expansion this year.
The central bank predicts 1.7% growth in 2015.
In the first quarter, German gross domestic product grew 0.3% which was a marked slowdown from 0.7% growth in late 2014, with foreign trade largely to blame.
Ifo predicts that the number of people in work will continue to rise this year and next and also expects businesses to expand their investment due to cheap financing costs.
Also today, the Kiel Institute for the World Economy said it expects the economic recovery as well as income from the auction of radio frequencies for mobile phone network operators to boost the German government's coffers.
The Institute expects the government to achieve a surplus of €18.7 billion this year, equivalent to 0.6% of gross domestic product.
The IfW forecasts growth of 1.8% this year and expects economic expansion to accelerate to 2.1% in 2016.
