The German government has said the country's economy will grow much more quickly than previously expected this year, as Europe's top economy continues to motor ahead despite the euro zone debt crisis. The economy is set to expand by 2.3% this year, the latest official forecast said. This was a sharp hike from the 1.8% estimated in October as Europe's powerhouse continued an impressive bounce back from a deep recession. 'The upswing is on firm ground and is now self-sustaining,' economy minister Rainer Bruederle said as he presented the report in Berlin. As the economy powers ahead, so Germany's unemployment rate is expected to fall further in what has been dubbed a 'jobs miracle'. The government expects an average jobless rate of 7% in 2011, down from 7.7% in 2010. The positive growth figures are also set to help Germany return to below the EU's 3% of GDP limit on public deficits. The 2011 deficit should be 2.5% of gross domestic product, the minister forecast. As the world's second largest exporter after China, Germany's recovery was initially driven mainly by increased demand for its goods abroad as the global financial turmoil eased. But recently, the upswing has been increasingly sustained by domestic demand as low unemployment and a buoyant economic mood have encouraged consumers to prise open their wallets and firms to make investments. The German economy shrank by 4.7% - the worst recession in more than six decades - in 2009, but bounced back in 2010 to register growth of 3.6% - its best performance since reunification in 1990. Meanwhile, Mr Bruederle said the economy was set to grow by 1.8% in 2012, giving the German government's first forecast for next year.