Bundesbank raised its growth forecasts for the current year to 3% instead of 1.9% estimated in June after the better-than-expected growth figures recorded in the second quarter, while last year the economy shrank 4.7%.
Germany, the largest economy in the euro zone, expanded 2.2% in the second quarter, the fastest pace of growth in nearly 20 years, boosted by the rise in exports that was spurred by the euro's depreciation.
Bundesbank added that the pace of progress is likely to continue in the second six months of this year but with normal rate.
With regard inflation, the bank predicts a continuation of moderate upward price developments.
Concerning budget deficit, the bank expects the deficit to reach 4% next year and 3% in 2012.