The good news had already leaked out ahead of the official release on Thursday of the annual spring forecast of Germany's six leading economic institutes: Europe's largest economy will grow faster than had been previously expected  this year. The economic experts ratcheted up their forecast for 2006 from 1.2 percent to 1.8 percent. That would be the best showing since 2000 and would help Germany's budget deficit sink to 2.9 percent --falling below the EU limit of 3.0 percent for the first time in years. Even record high prices for oil don't seem to pose too much of a threat to the upswing. After years of meager growth, the news has sparked hope that may Germany has turned a corner that could help alleviate its chronically high unemployment.

Apparently German consumers -- who have been notoriously stingy of late -- are gaining confidence as well and reaching for their wallets again, according to an influential survey released on Wednesday. Some pundits believe Germans are simply tired of all the grousing and pessimism that has so dominated the country in recent years. Hosting the World Cup this summer is likely to unleash another consumer bonanza even if the German team doesn't win the soccer tournament. But other observers are chalking up the new found willingness to spend to the government's plans to hike the value-added tax (VAT) from 16 to 19 percent starting next year. In other words, consumers are eager to buy now before everything becomes more expensive.

German newspapers on Thursday are generally pleased by the upward growth forecast revision and the positive report on growing consumer optimism, but they also warn the silver lining could have a cloud.

The centrist Berlin daily Der Tagesspiegel devotes a front-page editorial to the economic news, starting off with the caveat that "reality and theory often have surprisingly little in common -- especially when it comes to the economy." Despite the threat of coming tax increases both business and consumers inexplicably appear to be in the best of moods this spring. But the paper optimisticly notes that the revised growth forecast and the consumer survey show that "the upswing is there" and "the economy is more robust than previously thought." Der Tagesspiegel even thinks the good times could survive the government's plans to hike the VAT next year -- even though it will certainly be an unwanted burden. "But rather it's that the widespread yearning for a boom is strong after a long period of stagnation and recession," writes the paper, optimistically adding that even if consumer spending again begins to plunge the economy can still rely on the important export sector." The editorial ends by pointing out that only because things have been so dire is anyone getting excited about the prospect of 1.8 percent growth: "Growth rates of 3 or 4 percent aren't utopian, other countries show that's possible."

The business daily Financial Times Deutschland expresses some amazement that the global economy is remaining so resilient in the face of surging oil prices. "European companies seem to be able to easily shrug off the rapidly rising prices for oil and other sources of energy just like the Americans and Asians. The world economy is humming despite all the risk factors," FTD writes. Pointing to improving consumer sentiment and a recovering construction industry, the paper sees Europe's largest economy also on the rebound. "Even in Germany, the domestic economy is finally igniting."

The right-wing Die Welt isn't quite so bubbly in its analysis of the latest economic news, pointing out that the six economic institutes might have raised their growth forecast for this year, but they expect the economy to slow considerably in 2007. The paper says the main culprit for the slowdown is the government's intention to raise taxes next year. "It's a paradox. For years Germany has waited for a recovery and now that it's here, it's the government that will promptly strangle it," comments the daily. Calling the plans to raise taxes strange under the current circumstances, Die Welt calls for the proposed VAT hike to be dropped. "The grand coalition has to heed the warnings from the business sector" and economic experts.