The economy is set to expand by 2.3 percent this year, the latest official forecast said, a sharp hike from the 1.8 percent estimated in October as Europe's powerhouse continued an impressive bounce back from a deep recession.
"The upswing is on firm ground and is now self-sustaining," Economy Minister Rainer Brüderle said as he presented the report in Berlin.
Brüderle said output in 2012 would likely grow 1.8 percent, giving the government's first forecast for next year.
As the economy powers ahead, so Germany's unemployment rate is slated to fall further in what has been dubbed a "jobs miracle." Berlin expects an average jobless rate in 2011 of seven percent, after 7.7 percent in 2010.
The positive growth figures are also set to help Germany return to below the European Union's three-percent limit on public deficits. The 2011 deficit should be 2.5 percent of gross domestic product, the minister forecast.
"Germany is therefore on its consolidation course," the report said.
As the world's second largest exporter after China, Germany's recovery was initially driven mainly by increased demand for its goods abroad as the global financial turmoil eased.
But recently, the upswing has been increasingly sustained by domestic demand as low unemployment and a buoyant economic mood have encouraged consumers to prise open their wallets and firms to make investments.
In 2009, as demand for goods "made in Germany" collapsed, the country suffered a brutal downturn, with the economy contracting by 4.7 percent - the worst recession in more than six decades.
But this was followed by what one analyst has termed a "mind-boggling" recovery in 2010, as Germany registered its best performance since reunification in 1990, growing by 3.6 percent.
And while the 2.3 percent forecast for 2011 represents a significant decline from last year's heady result, it means that Germany has recovered the ground lost during the financial crisis.
Corporate Germany has also bounced back strongly from the recession, with the DAX index of leading shares at its highest level since May 2008, before the global financial crisis broke.