Poland's annual economic growth accelerated to 4 percent in the first quarter, the fastest pace in over a year and ahead of analysts' expectations, confirming a rebound in the European Union's largest eastern member. Analysts said the acceleration was driven by a pick-up in investment and gains in consumption that were supported by record-low unemployment and new child benefit payments introduced last year.

In quarterly terms, growth slowed to 1.0 percent from a revised 1.7 percent in the last three months of 2016, a first estimate of gross domestic product released by the statistics office on Tuesday showed. "We believe growth was driven by strong consumption (4.6-4.8 percent year-on-year) and a significant acceleration in investment (plus 3-4 percent)," economists at mBank said.

Investment declined throughout last year, partly due to lower inflows of European Union aid. Critics of the right-wing Law and Justice (PiS) party government, which came to power in late 2015, had said the fall in investment was due to domestic policy unpredictability.

The PiS launched a child benefit programme in 2016 worth about 1 percent of GDP and passed legislation to reduce the retirement age starting from late 2017, but has improved tax collection as well. The party also overhauled legislation on the constitutional court - a move criticised by the European Union executive as a threat to the rule of law in Poland - to made it harder for judges to block new laws.

Copyright Reuters, 2017