(Corrects quote in third paragraph to say ... next year ..., not... this year)
TOKYO, Dec 26 (Reuters) - Japan's Economics Minister Kaoru Yosano said on Friday the government would act flexibly on possible additional fiscal measures if economic conditions deteriorate further.
He also said he doubted that any quantitative easing by the Bank of Japan would directly lead to an increase in loans to companies.
"In the second half of next year, we cannot rule out the possibility that Japan and other parts of world may face even worse economic conditions," Yosano told Reuters in an interview.
Asked whether the government would consider additional fiscal measures in such a case, Yosano said: "We will act flexibly."
The government has already pledged measures totalling 75 trillion yen to fight the economic downturn, of which 12 trillion yen is earmarked for actual spending in the current fiscal year and the next fiscal year.
Japan's industrial output, known to be closely linked to the country's economic cycle, posted a record fall in November, government data showed on Friday, as companies halted factory lines to deal with a sudden plunge in global demand.
Pressured by deepening economic gloom and the yen's sharp appreciation, the BOJ decided last week to cut interest rates to 0.10 percent and adopted measures such as increasing its outright buying of Japanese government bonds and temporarily purchasing commercial paper outright. (Reporting by Yuko Yoshikawa and Yuzo Saeki; Editing by Edwina Gibbs)