The enigmatic 21-year-old - who also admitted a visit to a strip club last week was a "mistake" - is confident City will finish above Sir Alex Ferguson's team. The Blues are currently two points clear of the Red Devils.
"We are a great group," Balotelli told Gazzetta dello Sport. "We have quality. If we remain together until the end, United will finish behind us and they are not to be feared."
Balotelli joined City in the summer of 2010 from Inter Milan and has scored 14 goals in 24 games this season. The Italian says he is now a much better player and expects to keep improving.
"The intensity and the effort that I am giving this year, also in training, cannot be compared to that of last year," he said. "I have grown and certain things I've understood."
Balotelli was recently left out of Italy's national team for the second time after breaching national team coach Cesare Prandelli's code of conduct. Prandelli did not select him for the Azzurri's friendly against the United States because Balotelli was serving a four-match ban after kicking out at Tottenham's Scott Parker on January 22.
"I was hurt," Balotelli said. "I always say it in the changing room that the most fascinating jersey for me is that of the national team because of what I feel when I represent my country.
"I often think of the European Championships. I am saddened to have missed the friendly in Genoa (against the United States). There is an ethical code and I accept it, even though I don't think I deserved it."
Balotelli emerged from a Liverpool strip bar in the early hours of Friday morning ahead of Saturday's game at home to Bolton despite a club curfew, and he said: "I didn't do anything wrong at the club. But I understand that if she (girlfriend Raffaella Fico) had gone with her friends to a strip club, I would have been very angry.
"If you love a woman, you can avoid causing that pain. That was my first mistake. The second was to go two days before a game."