The German economy has overcome the headwinds of last year and will regain growth momentum in 2015 thanks to falling oil prices and a weak euro, said an industry lobby group on Wednesday.
Uncertainties from both inside and outside the country, however, remain, showed other reports on the same day.
The Association of German Chambers of Industry and Commerce (DIHK) on Wednesday raised its forecast for German economic growth from 0.8 percent to 1.3 percent in 2015.
"The low oil prices relieve consumers and businesses, the weak euro drives exports, the low interest rate continues to promote construction activities," Martin Wansleben, CEO of DIHK, in a statement.
Gross domestic product (GDP) of Germany increased by 1.5 percent in 2014 mainly thanks to a strong start due to a mild winter. It narrowly avoided a recession during the summer months due to external uncertainties involving the Ukraine crisis and weak growth of the eurozone, only reviving near the year's end.
A recent survey showed that confidence of German consumers, enterprises, and investors were back on an upward trend.
"The economic downturn of last summer is over," said the German economy ministry in its monthly report on Wednesday, "orders and production in industry rose in the fourth quarter and the mood in the companies is brightening."
The ministry said the weak euro and the extremely low price of oil contributed to the revival, and positive trends in the labor market supported consumption.
Despite these stimulus, however, the environment outside Germany remained difficult, the ministry warned.
"The end of the conflicts in Ukraine is not emerging. The political developments in Greece also poses uncertainties," it said.
Tensions between the West and Russia and their tit-for-tat sanctions hit German companies' investment confidence in 2014. German exports to Russia, its third largest trading partner outside Europe behind China and the United States, plummeted by 20 percent last year.
Also on Wednesday, German auto giant Volkswagen reported that delivery of its VW passenger cars in January declined by 2.8 percent month-on-month.
Delivery in Europe and the Asia-Pacific region fell by 1 percent and 1.2 percent respectively, while sales in Russia plunged by 28.3 percent.
"We are facing a challenging year," Volkswagen sales chief Christian Klingler said, "Volkswagen was not immune to the uncertainties in some regions that have continued into the current year."
In its report, DIHK also warned that recent stimulus from low oil prices, weak euro and low interest rates might just be concealing the increasing pressure in Germany.
According to its survey based on 27,000 companies, rising labor cost and a shortage of skilled workers were among the most serious concerns of German businesses.
The mandatory minimum wage, which was introduced across Germany at the start this year, dampens job growth, DIHK's Wansleben said.
In 2015, gross investment would only grew by 1.7 percent, much lower than the rate of 3.1 percent in 2014, the association predicted, while personal consumption would continue to play a key role in supporting the economy with a growth rate of 1.5 percent, higher than the 1.1 percent of growth in last year./.