Next year, the economy should grow by 1.8 percent, the Bundesbank said in a statement, which underlined the "German economy's rebound" after the global financial and economic crisis.
The new forecast is in line with the expectations of most economists – and of the International Monetary Fund – who suggested this year's growth would reach 3.0 percent after the publication of official figures showing 1.5 percent growth in the first quarter.
The German government is officially banking on growth of 2.6 percent, but Chancellor Angela Merkel recently acknowledged it might exceed 3.0 percent.
Last year's GDP rose by 3.6 percent after a 4.7 percent drop the previous year, with both exports and internal demand fuelling growth.
Economic recovery has accelerated in recent months, the central bank said in a report last month, indicating that German industrial production will help fuel expansion and exports will once again play a leading role.
"In addition, German exporters are benefiting from recent changes at the level of international exchange rates," the Bundesbank said, a reference to the euro's fall in value against other major currencies.