BERLIN, March 6 Reuters Two German forecasting institutes cut their 2024 growth forecasts on Wednesday in the latest blow to the euro zone39;s largest economy.

The Ifo institute reduced its forecast to 0.2, from its previous projection of 0.7 in January, citing weak consumption and high interest rates. The IfW Kiel Institute lowered its forecast to 0.1 from 0.9 previously.

The economy is paralysed, Ifo39;s head of forecasts Timo Wollmershaeuser said at a presentation. If you look at surveys of companies and households, you realise that the mood is poor and uncertainty is high.

Consumer restraint, high interest rates and price increases, the government39;s austerity measures and the weak global economy are currently dampening the economy in Germany and leading to another winter recession.

The German economy shrank by 0.3 in the final three months of 2023 and it is expected to contract again in the first quarter, according to Wollmershaeuser. Two consecutive quarters of falling output are defined as a technical recession.

Ifo president Clemens Fuest said Germany was suffering from a combination of cyclical and structural problems, explaining its weaker performance than many other European countries.

Structural problems include a lack of competitiveness in the housing sector and in industry, with the latter hit by low investment, he said.

With the gradual easing of interest rates and inflation, economic output should accelerate towards the middle of the year,…