Higher growth expected

"Economic success doesn't just happen," Gabriel said when presenting the government's growth forecast in Berlin on Wednesday. He announced that growth is expected to come in at 1.8 percent both this year and in 2016, but that Germany could by no means afford complacency despite solid growth rates.

"We have to focus on improving our medium-term growth prospects," Gabriel said, adding that investment in education, infrastructure and research were vital.

The government's projections are slightly higher than its previous forecast, but lower than the leading economic institutes' latest forecast, which expects GDP to increase by 2.1 percent in 2015 and 1.8 percent next year.

Gabriel also said the government expects employment to reach a record high of 43.1 million in work in 2016, with wages rising and strong consumer demand.

He emphasized that unlike in previous upticks in the economy "consumer demand is driving this upswing." Germany has long been criticized for focusing on exports and not doing enough to encourage consumer spending in a country famed for saving its pennies and eyeing any form of debt with a degree of suspicion.

Gabriel also said that Germany's controversial minimum wage, which came into effect in January, had added to consumer confidence.

ng/hg (dpa, AFP)