(AFP) The government will take extra measures if the US economic slowdown proves worse than expected, a senior finance ministry adviser said today.

Mustapa Mohamed said there was a "reasonable prospect" that the US slowdown will be short-lived.

"Aggressive reduction in interest rates, continued strong consumer spending and tax cuts will support US growth," he said.

"But we are not taking chances. We are in fact taking measures to guard against the possibility of a steeper-than-expected slowdown in the US," he told an economic conference.

Mustapa said there was general agreement that the US economy would pick up in the second half of the year, growth in Europe would remain robust and the recovery in Japan would resume next year.

Almost 21 percent of all Malaysia's exports go to the United States, making it vulnerable to a downturn there.

In March the government unveiled a RM3 billion fiscal stimulus package. But the independent Malaysian Institute of Economic Research says the effects of this may only be fully felt next year.

It has cut its gross domestic product growth forecast to four percent this year from five percent.