Washington, Oct 30 (DPA) The US economy contracted by 0.3 percent in the third quarter of 2008, the sharpest decline in seven years amid a global financial crisis that has blocked credit access and severely depressed consumer spending, the US government said Thursday.The initial estimate by the Bureau of Economic Analysis puts the US on track for a recession in the second half of the year. A recession is rated as two straight contracting quarters.

The figure was slightly better than expected as economists had predicted a 0.5-percent drop, according to Bloomberg News.

The world’s largest economy grew by an annualised 2.8-percent in the second quarter, thanks in large part to strong exports and a $170-billion fiscal stimulus package approved by Congress in March.

Consumer spending that makes up about two-thirds of US economic output was hit the hardest, shrinking by 3.1 percent in the quarter compared to a 1.2-percent increase in the second quarter.

Exports remain a positive compared to the rest of the economic activity, but slowed sharply to 5.9 percent, from 12.3 percent in the second quarter, as fears of a global recession have depressed demand around the world.