Even as the rest of Europe remains on an edge about its economic recovery, Germany continues to post strong growth, as shown by the German investor confidence indicator on Tuesday.
The ZEW economic-sentiment indicator jumped to 15.4 points in January, nearly double of economists' expectations of 7 points, and up from 4.3 in December.
The current economic conditions indicator rose to 82.8 points from 82.6 points, below the outlook of 83.7 percent.
However, most economists remain confident that German economy continues to remain one bright spot in a region plagued with heavy government debts.
The currently low level of real interest rates should strengthen demand for capital equipment in Germany. Increased job security stimulates private consumption, ZEW President Wolfgang Franz said in a statement.
An increase in export orders, combined with hopes that the U.S. economy is also improving drives much of the growth in the country.
The region also has one of the lowest unemployment figures in the Eurozone. The jobless rate, infact, is at the lowest levels seen in nearly two decades at 7.5 percent.
Rainer Bruederle, the German Economy Minister, forecast GDP growth of over 2 percent in 2011, above the Ministry's previous forecast of 1.8 percent, Dow Jones reported.
The official forecast will be announced on Wednesday.
Meanwhile, fears continue to plague the eurozone as speculation continues about which among Spain, Portugal and Italy will be the first to fail and ask for further aid from the fund set up by the EU and the International Monetary Fund.
The EU is considering to expand the fund, if there is adequate support from IMF.
However, Germany and France are not too keen to boost the fund, which currently stands about about 440 billion euros.
Bruederle said that there is no imminent reason to increase the fund, leading the euro to fall on Monday.
Recent media reports state that Germany is also among of one of the few countries that are pressuring Portugal to seek aid faster.