The latest forecast from the government's independent Office of Budgetary Responsibility show that Britain is out of the financial danger zone.
Growth this year was revised upwards, from 1.2% to 1.8%, and growth for 2011 was revised down slightly from 2.3% to 2.1%.
The OBR said that, thanks to the Coalition Government's decisions in October's Spending Review, it was revising downwards its forecast of public sector job losses, from 490,000 to 330,000.
Responding to the positive economic news in the House of Commons, Chancellor George Osborne said:
"When we came into office Britain was in the financial danger zone.
"Our economy was unstable, our public finances out of control, our country on the international watch-list to avoid.
"We took decisive action.
"Now the independent OBR have confirmed that the British recovery is on track, our public finances are on the mend, our debt is under control, employment is growing and our economy is rebalancing."