(Bloomberg) -- Colombia’s credit outlook was cut to negative by Moody’s Ratings, which cited the impact of sluggish economic growth on government revenue. 

The company, which left Colombia’s rating at Baa2, two notches above junk, said it cut the nation from stable as the combination of lower-than-expected growth and higher borrowing costs are putting additional pressure on government accounts. 

“These factors are hindering the authorities’ present and future ability to comply with the fiscal rule increasing the risk of a potential deterioration in Colombia’s credit profile,” Moody’s analysts wrote in a statement. 

Economic growth lagged forecasts in the first quarter when gross domestic product expanded 1.1%, below the median forecast of 2.1%. 

The Moody’s decision follows a similar move by S&P Global Ratings, which revised the nation’s outlook to negative in January. S&P rates Colombia BB+. 

Investors have dumped Colombian assets as fiscal concerns have grown. Hard-currency bonds have slipped 2.9% this year, compared to gains of 2.9% for emerging-market sovereign debt. The peso has lost about 7.5% against the dollar, according to data compiled by Bloomberg. 

The government announced a $5 billion spending cut last month amid a revenue shortfall, in what was seen as an attempt to appease the market. 

Moody’s said investors continue to place greater weight on political dynamics over the strength of Colombia’s institutions and improvement it’s made to debt metrics. 

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