Moody's downgrades Pennsylvania on pensions, economy Mon Jul 16, 2012 3:26pm EDT (Reuters) - Moody's Investors Service downgraded Pennsylvania's general obligation debt to Aa2 from Aa1 on Monday, citing concerns about the state's growing unfunded pension liabilities and a slow economic recovery. The cut comes just before a scheduled July 24 sale of $363.6 million in general obligation refunding bonds, which Moody's rated Aa2 on Monday. Related bonds were also downgraded a notch, Moody's said. It was not immediately clear how much total debt was affected. Moody's analysts said in a statement that the rating action was based on Pennsylvania's weakened financial position, and on "the expectation that large and growing pension liabilities and moderate economic growth will challenge the return to structural balance, contributing to a protracted financial recovery." The credit rating agency also revised its outlook to stable from negative, saying that the state's economy has stabilized but will grow more slowly than other states on average. A spokesman for Governor Tom Corbett was not available for comment. Reporting by Hilary Russ; Editing by Leslie Adler