German officials recently predicted that up to 800,000 migrants would arrive by the end of the year, many of them refugees fleeing war and persecution in Syria, Iraq and Eritrea.
"The right to political asylum has no limits on the number of asylum seekers," Merkel told the Funke consortium of newspapers in an interview.
"As a strong, economically healthy country we have the strength to do what is necessary" and ensure every asylum seeker gets a fair hearing, she added.
Even prosperous Germany has struggled to meet the demand for additional housing for the tens of thousands of migrants arriving monthly.
Merkel said her government wasn't planning to raise taxes to pay for the additional cost. But her governing coalition will be meeting tomorrow to discuss how best to cope with the migrant influx.
Germany's willingness to help migrants has contrasted starkly with other European governments, such as Hungary and Britain. This stance has added to the desire among many migrants to strike out for Germany.
"This wasn't always the case, but I still have to insist on a fair distribution of the burden across all of Europe," she was quoted as saying. Germany and some other European countries have called for the creation of special reception centers in Italy and Greece, where migrants can stay while their asylum requests are processed.
Merkel said that would prevent the uncontrolled entry into Europe of people who might pose a security threat. "Only this way can the security agencies check whether they have information about certain people," she was quoted as saying.
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