The German economy expanded by 1.7% in 2015, a slight improvement on the previous year and the strongest rate in four years.
This is according to a preliminary estimate from the Federal Statistics Office today.
Growth in Europe's largest economy was driven by private consumption, which increased at its strongest rate since 2000. Household spending has been fuelled by robust wage increases, low inflation and record high employment.
"The most important driver of growth was domestic consumption," the head of the Statistics Office, Dieter Sarreither, said in a statement.
Economists polled by Reuters had expected growth in gross domestic product (GDP) of 1.6% for 2015, the same rate as 2014.
Analysts said the annual data suggested the economy had grown by 0.4% on the quarter in the final three months of 2015.
Private consumption expanded by 1.9%, contributing 1.0 percentage points to 2015 growth, while public spending added 0.5 points. Trade contributed 0.2 points, although imports expanded at a slightly higher rate than exports.
The GDP rise was in line with the government's forecast. For 2016, Berlin expects an expansion of 1.8%.
A record influx of more than a million migrants last year is pushing state spending higher as authorities spend more on housing and integration measures.
Looking ahead, analysts said that the two-speed recovery, with strong consumption and services on the one hand and sluggish industrial production and exports on the other hand, should continue in 2016.
