Moody's Investors Service has changed its outlook on the Alberta economy from "stable" to "negative" and says the situation will get worse unless the province's NDP government takes action.

Despite this change, the ratings agency is still maintaining the province's AAA credit rating

"The negative outlook for the province of Alberta reflects the rising risk that the province's fiscal position will deteriorate further than previously expected in an environment of protracted low oil prices and deterioration of economic activity," the credit ratings agency said in a report released Monday. 

"Without corrective fiscal action, this will lead to higher than planned fiscal deficits and lower liquidity than forecasted in the 2015-16 provincial budget, resulting in more rapid and higher debt accumulation across the medium term."

Moody's said Alberta can regain a "stable" outlook if it limits debt and debt-servicing costs by meeting the forecasts in that budget, tabled in October, predicting a $6.1-billion deficit for the end of the fiscal year in March 2016. 

The Alberta government plans to spend $34 billion on capital projects over the next five years in a bid to spur the economy. 

Last fall, the government passed legislation allowing it to borrow a maximum of 15 per cent of nominal GDP. By 2017-18, the total amount of debit for capital projects and infrastructure is projected to be $36.6 billion, or 10 per cent of GDP.

Alberta Finance Minister Joe Ceci said he is prepared to cut spending as long as it doesn't affect frontline services in health and education. He said the government is still committed to spending money on infrastructure to create jobs and stimulate the economy. 

Ceci said all government spending is under review, with some priorities set aside until the fiscal situation improves. 

"We will look at all ministries, look at all expenditure lines to make sure we are spending at the right places and where we can push out things like platform commitments, we are looking at that at this time as well." 

"Where there are parts of our budget that can be downsized or moved off, we need to do those things so that we get our budget back in line with what Albertans can afford and what we can manage," he said.

Last month, rating agency Standard and Poor's downgraded Alberta's credit rating from AAA to AA+. 

Wildrose Leader Brian Jean called on Ceci to heed the plan his party released following that downgrade.

"Wildrose has long warned the NDP government that without taking meaningful steps to control spending, and limit borrowing, it would do damage to investors' confidence in Alberta's credit rating," Jean said.

"With the NDP delaying their royalty review, the legislature and their 2016 budget, investment confidence in Alberta will only continue to weaken until the government puts together a serious action plan."

The Alberta Legislature resumes sitting on March 8. Ceci is expected to table the 2016 budget in the spring.