German economic growth will this year match the record performance of 2000 as it accelerated to 3.2 per cent from 2.8 per cent last year, the IfW economic research institute forecast today.
Next year growth in GDP will slow slightly to 2.7 per cent, but there is no sign of the German economic upswing ending, the institute said in its latest forecasts.
"Nearly all indicators paint a very positive picture of the current economic situation," the IfW said in a statement.
In March, the IfW had forecast 2007 growth of 2.8 per cent for Europe's largest economy, which would have matched last year.
For 2008, it had predicted growth of 2.4 per cent. Over the past 18 months a predominantly export-led German recovery has broadened as the domestic economy has fired up, fuelled by strong investment and a labour market recovery.
Business sentiment has proved unexpectedly robust, with the Ifo institute's gauge of corporate morale still close to its highest level since German unification in 1990.