German Finance Minister Hans Eichel said in a newspaper interview released on Saturday that he was concerned about domestic demand, adding there was a risk in Germany that sentiment would peg back growth.
"Domestic demand gives me concern. It has a lot to do with the sentiment in the country," Eichel told the Frankfurter Allgemeine Sonntagszeitung, adding society as a whole, not just the government, was responsible for improving the mood.
"It is certain that psychology can be an economic restraint and it can be an economic motor. In Germany the risk is great that it remains a restraint. We all need to work at this."
Germany is struggling to recover from three years of stagnation. Its gross domestic product shrank by 0.1 percent in 2003, the first contraction in a decade. Fourth quarter GDP barely grew as consumer spending remained sluggish.
Eichel said Germany's dependence on exports made it reliant on the global economy, but commented that German exports were faring well despite the strength of the euro against the dollar.
The government is sticking to its forecast that the economy will grow by 1.5 to 2.0 percent this year.