In their twice-yearly report, the institutes more than doubled their previous forecast for Europe's top economy, projecting output growth of 3.5 percent in 2010, dropping to 2.0 percent next year.
This would be the strongest growth since European Union records began and the best rate since the post-reunification boom in 1991.
The positive economic performance is expected to cut unemployment numbers to below the psychologically significant three-million mark next year for the first time since 1992, the institutes added.
"The German economy is in an upswing. It is on good track to make up for the fall in production caused by the crisis," the report said.
Speaking in Japan, where he is on an Asian tour, Economy Minister Rainer Bruederle welcomed the latest projections, saying they "confirmed the opinion of the government that we are enjoying a powerful upswing."
Germany, the world's second-biggest exporter after China, was hit hard by the financial crisis, as demand for its goods dried up around the world. It suffered the worst recession for 60 years in 2009, with output shrinking 4.7 percent.
In further good news for Chancellor Angela Merkel, the institutes projected that Germany's public deficit would be 2.7 percent of gross domestic product (GDP) in 2011, dropping below the EU's three-percent limit.
This would make Germany the first major eurozone country to get below the three-percent bar.
Spain and France both forecast a deficit of six percent of GDP in 2011 and Italy 3.9 percent, according to their governments.
Merkel's centre-right government currently forecasts 1.4 percent growth this year, but ministers have indicated that the projection will be raised when fresh estimates are released on October 21.