(Bloomberg) -- Economists covering Colombia were whipsawed as two ratings agencies changed their outlook for the nation’s credit rating in opposite directions in the space of an hour.

Moody’s Investors Service lifted Colombia’s outlook to stable from negative, citing government measures to stabilize debt. Fifty minutes later, Fitch Ratings did the opposite, cutting the outlook to negative from stable, arguing that the government’s measures are inadequate.

Both agencies affirmed Colombia at the second-lowest investment grade rating. The government of President Ivan Duque raised income tax on high earners, while cutting the levy on corporate profits, in changes that took effect at the start of the year.

“A rise in government revenue this year following the tax reform approved in December 2018, in addition to the authorities’ decision to rein in spending by freezing a portion of the 2019 budget, will support this goal,” of hitting the fiscal targets, Moody’s said.

Fitch, in contrast, said that the tax reform will weaken government revenues from next year, as the tax cuts for companies kick in.

In March, the committee that oversees Colombia’s “fiscal rule”, or balanced budget act, relaxed its deficit targets through 2022, citing the cost of dealing with the arrival of more than one million migrants from Venezuela. Fitch said the frequent changes to the target have made fiscal policy less predictable and credible.

“It’s curious that, looking at the same picture, they come to very different conclusions,” said Camilo Perez, chief economist at Banco de Bogota. “One says the government has lost credibility on fiscal policy, while the other says the government is doing good things.”

Perez said he is more aligned with Fitch, with the nation facing serious challenges to keep the deficit under control. There’s unlikely to be any market reaction since, in aggregate, Colombia’s ratings outlook haven’t changed, Perez said.

The changes in outlooks come in the same week that Morgan Stanley and Credit Suisse said deteriorating external accounts made the Colombian peso especially vulnerable to rising trade tensions between the U.S. and China, while the central bank proclaims its indifference to the recent devaluation.

The peso weakened to a three-year low on Thursday, and its 4.3% drop this month is the biggest in emerging markets.

To contact the reporters on this story: Matthew Bristow in Bogota at mbristow5@bloomberg.net;Oscar Medina in Bogota at omedinacruz@bloomberg.net

To contact the editors responsible for this story: Matthew Bristow at mbristow5@bloomberg.net, Ezra Fieser

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