The German government upgraded Wednesday its forecasts for growth both this year and next year to 1.8 percent, saying Europe's biggest economy is "in an upturn."

Economy Minister Sigmar Gabriel said "Germany is on a solid path of growth, driven by favourable developments on the labour market, rising wages and increased employment. The main pillar of recovery is consumer spending."

Previously, the government had been pencilling in gross domestic product (GDP) growth of 1.5 percent in 2015 and 1.6 percent in 2016.