Berlin - The German government expects growth of Europe's top economy to pick up sharply this year and next, driven largely by domestic demand, it said on Wednesday.

“The German economy has moved into a stable and broad-based recovery,” said economy minister Sigmar Gabriel.

“Bouyed by domestic demand, German gross domestic product (GDP) should expand by 1.8 percent this year. And in 2015, growth will pick up further to an anticipated 2.0 percent,” Gabriel said.

In 2013, the German economy notched up only modest growth of 0.4 percent.

The 2014 prognosis is also fractionally more optimistic than the 0.7 percent Berlin had been pencilling in last autumn.

The minister rejected recent criticism that Germany's economic prowess comes at the expense of the eurozone's weaker members.

Critics argue that Germany needs to boost domestic demand and so help its EU partners by spurring export-driven growth in their economies rather than continue to rely mostly on its own exports for growth.

Berlin has persistently dismissed the criticism, arguing that the high surplus reflects the competitiveness of German firms.

Gabriel said on Wednesday that “the momentum of German domestic demand is not only good news for Germany, but also for our European partners. We are moving closer to our goal of correcting the economic imbalances in the euro area,” the minister said.

Gabriel said the current robustness of the labour market played “a key role for the momentum of domestic demand.”

Unemployment in Germany is currently close to all-time lows and employment, too, is rising to new records, with the number of people in work projected to rise by 240,000 to 42.1 million this year.

“Favourable growth and earnings prospects for companies are causing recruitment and wages to rise,” the report said.

“This is translating into noticeable increases in income for private households. In view of the favourable conditions, households are expanding their spending on consumption and on home construction.”

Given the anticipated strength of domestic demand, “imports will rise faster than exports this year,” the ministry said.

“This will reduce the current account balance.”

“Rising imports and increased investment abroad will aid economic recovery in Europe,” said minister Gabriel. - Sapa-AFP