Minister for Environment, Planning and Countryside Carwyn Jones said the expansion of kerbside recycling and improvements at recycling centres had helped increase the amount recycled.
These figures show that the message is getting through and we need everybody to keep playing their part by recycling as much as possible.
The next target is to recycle or compost 25% of our waste by 2006/07. I am confident that the people of Wales are willing and able to help us achieve that, he said.
Each of the local authorities in Wales managed to increase their recycling rates. Ceredigion achieved the highest rate for both recycling (30.39%) and recycling and composting together (35.58%). But Cardiff came bottom of the table, recycling and composting only 12.12% overall.
Waste Awareness Wales chairman councillor Richard Parry Hughes said: As a nation, we now need to keep up the momentum and work towards hitting our national recycling and composting target of 40% by 2009/10.