The Bundesbank has said Germany 's economic recovery is still too reliant on exports to be self-sustaining and its public sector deficit is on track to equal last year's record level.
In its monthly report for May, the German central bank also said high oil and commodity prices could pose a risk to a global recovery that so far seems undented by geopolitical events.
"The economic recovery in Germany gained in strength somewhat in the first quarter," the Bundesbank wrote, noting the economy grew at a quarter-on-quarter rate of 0.4 per cent.
"However, it would be hasty to simply extrapolate the higher growth rate of the first quarter . . . the cyclical recovery remains on a narrow footing," it said.
Domestic demand remained weak, the Bundesbank wrote, noting consumers were choosing to save rather than spend, which it said was unusual when compared with previous periods of recovery.
"The current rise in the savings quota could be related in part to more awareness about the problems faced by the public health and pensions system and the need to provide for one's own cover," it said.