Moody’s has cut Spain’s credit rating by two notches and says the outlook for the Spanish economy is negative.

The credit rating agency downgraded Spain’s rating Tuesday to A1 from Aa2. It says no credible resolution to the country’s debt crisis has emerged and that it will take time for confidence to return.

Moody’s says it now expects the Spanish economy to grow just 1 percent next year — down from an earlier forecast of 1.8 percent.

The Standard & Poor’s agency cut Spain’s credit rating last week.

Spain is drowning in debt and burdened by a stagnant economy. Many European experts believe the country may be next in line for a possible bailout from the European Union and International Monetary Fund.