Men work at the assembly line in the truck production plant of truck and bus-maker MAN AG in Munich, Germany July 30, 2015.
Gross domestic product climbed 0.4 percent sequentially, the same pace of growth as seen in the third quarter but weaker than the previously estimated 0.5 percent. Still, it marked a sharp rebound after the German economy barely expanded over the summer months. The growth rate for the fourth quarter was revised down from 1.8 percent.
The central bank is injecting billions of euros into the economy every month and has also implemented ultra low interest rates.
Troubled Greece saw its economy contract by 0.4 per cent, meaning its growth is only 0.3 per cent year on year. This means that the German economy started 2017 on an economically strong footing. The bloc's economy is expected to remain robust this year.
The mood among German investors deteriorated more than expected in February, a survey showed on Tuesday, as uncertainties about the outcome of Brexit talks and future USA trade policies cloud the growth outlook for Europe's biggest economy.
While the struggles of the Italian economy in 2016 dragged down the overall growth among the 19 nations in the European Union, the success of the German economy raised the continent's combined GDP after it posted an annual growth rate of 1.9 percent at the end of the year.
It was largely due to household and government spending.
Nonetheless, the latest data suggest that the outlook for Euro-Zone growth in 2017 is hardly positive, with rising energy prices an additional negative factor despite robust domestic demand in Germany.
In economic forecasts released on Monday, the European Commission said risks to growth this year included potential trade disruption under U.S. President Donald Trump, who has argued for more protectionist policies.