Germany relied on foreign demand to expand in the third quarter

The news came as the German central bank said industrial output grew by 0.2% in September from August, instead of contracting 1.2% as first thought.

Finance minister Hans Eichel also said the world recovery meant future German economic prospects were good.

It comes after calls from Brussels for cuts to Germany's 2004 budget deficit.

Stability pact

The German government is officially forecasting zero growth this year, followed by growth of 1.5% to 2.0% in 2004.

On Friday Mr Eichel said: "Zero is more likely to be a red zero than a black zero."

However, the new sets of figures will provide further signs of hope that economic recovery is under way in the eurozone area.

Germany, the world's biggest exporter, relied on foreign demand to help it expand 0.2% in the three months to September, the first signs of growth since the same quarter a year earlier.

Mr Eichel reiterated Germany's commitment to the European Union's stability and growth pact.

European finance ministers will meet in Brussels next week to decide whether to force Berlin into action to cut its budget deficit, which is set to breach the EU limit of 3% of GDP for a third consecutive year in 2004.