Economy Minister Peter Altmaier's comments marked the anniversary of the government's agreement on a stimulus package to help kick-start the economy, which included cutting value-added tax during the second half of last year and giving families a one-time 300-euro (USD 366) payment per child.

Other aid packages have helped keep companies above water during months of virus closures, while extensive use of a short-term salary support program has kept workers on payrolls and unemployment in check.

Last year, Germany's gross domestic product shrank 4.9 per cent. That was the biggest decline since the financial crisis in 2009, but Germany did better than several other European nations because manufacturing took less of a hit than services during the pandemic.

“We can say today that the economic motor is running again,” Altmaier said.

“We believe that the economy will grow by at least 3.5 per cent this year, and I think it is even possible that we will achieve growth of somewhere between 3.5 per cent and 4 per cent," he added.

Altmaier said data has improved since the government raised its official 2021 forecast from 3 per cent to 3.5 per cent a month ago.

Coronavirus restrictions are being eased across Germany as infection figures have fallen sharply and the vaccination campaign has accelerated.

Germany administered over 1.19 million vaccine doses on Wednesday alone. It has now given at least one dose to 44.6 percent of its population and fully vaccinated 19.6 per cent.