German Finance Minister Mr Hans Eichel said today German growth could accelerate to an annualised rate of about 3 per cent by the end of the year.
Mr Eichel said in a speech he was not surprised international organisations predicted Germany would achieve growth of between 2.5 and 3 per cent in 2003.
"The exemplary interest rate policy in the United States is having an effect there. The economy is recovering, consumption is rising. We in Germany also face a new economic recovery," Mr Eichel said.
The latest indicators show industrial orders, for example, have increased strongly. Production in December also increased more rapidly than expected, and industry sentiment has also improved.
Mr Eichel blamed Germany's federal states for pushing the national budget deficit up close to the 3-per-cent-of-GDP limit, leaving Germany in danger of receiving an embarrassing rebuke from its European Union partners.
He said he would seek a national stability pact that would commit federal states to spending restraint. "We must talk about what consequences non-adherence to the [national] stability pact should have," he said.