The German economy grew a modest 0.7 percent last year and officials estimate that it shrank by around 0.5 percent in the fourth quarter. But the Bundesbank said in its monthly report Monday that its prospects have improved.
The bank notes that business confidence has brightened—powered by improving export hopes—adding that Germany's stable labor market suggests "that economic weakness will not continue for too long."
The Bundesbank added that there are signs of the economy improving already in the current quarter. Growth in the first quarter would prevent Germany from falling into a recession.