Economic Recovery

"I am counting on that fact that we will again raise the official economic growth forecast of 1.4 percent for 2007 in January," Glos said in a guest column for the Bild am Sonntag newspaper. "The mood has not been this good since reunification."

He did not specify what the new growth forecast would be.

Glos, a member of Chancellor Angela Merkel's conservative bloc, attributed the sunnier outlook to moderate sector-wide wage agreements and "new corporate strategies."

He added that government economic reforms had also improved German competitiveness and called for further measures including lower electricity prices and mobile phone roaming charges.

"The state must also economize in 2007," he said, adding that tax increases being introduced January 1 including a hike in the value-added tax to 19 percent from 16 percent must be a one-time measure.

Outlook is rosy

The German economy is on track to run up its strongest performance since 2000 this year, with exports booming and long-sluggish domestic demand also finally picking up.

Both the Organization for Economic Cooperation and Development (OECD) in Paris and the International Monetary Fund (IMF) in Washington recently gave the German economy a clean bill of health, forecasting growth of around 2.5 to 2.6 percent this year and 1.5 to 1.8 percent next year.

Unemployment has fallen back below the psychologically important level of four million and now stands at its lowest level since October 2002.