The annual soft power rankings by Monocle magazine and the Institute for Government ranks 30 countries who "best attract favour from other nations through culture, sport, cuisine, design, diplomacy and beyond."
Monocle magazine said: “Merkel may be painted as a stern taskmaster but it seems she has a softer side, or the country she leads does."
It said Germany’s rise as a soft power should not come as a surprise.
“The country is traditionally excellent at pursuing its ideas, values and aims using diplomatic, cultural and economic tools," it said. "By quietly doing the simple things well it is a country that has become a global power and the rest of us can feel comfortable with that."
Germans had been understandably wary about depicting a dominant image aboard, the magazine added, but it said that the country’s rise should not make everyone else feel uncomfortable.
Britain was second in the rankings while the USA was in third place, in the 2013 soft power survey.
But the survey came out on a day when German diplomacy took a hit in the Ukraine.
The Germans have been pushing hard to get the Ukraine to sign an agreement with the EU in return for releasing former prime minister Yulia Tymoshenko who is ill in prison.
But on Thursday Ukrainian politicians scuppered legislation that would have seen the president's rival released and given her permission to travel to Germany for treatment .