Poland’s economy expanded at a better than expected 3.9 per cent year-on-year in the fourth quarter, the fastest rate of growth in four years.

The surprisingly strong expansion, which topped forecasts of 3.8 per cent growth and 3.5 per cent in the previous quarter, comes as a boost to the governing Law and Justice Party (PiS).

The government’s policies have been lambasted by banks and rating agencies, earning Poland its first downgrade ever from Standard & Poor’s.

A sharp rise in spending, a heavy tax on banks and a requirement that banks bear the cost of converting mortgages from Swiss francs into zloty have faced heavy criticism, and helped to darken the economic outlook in the eyes of some investors.

The economy expanded 1.1 per cent from the previous quarter, in line with forecasts and ahead of the 0.9 per cent growth seen in the previous quarter.

Chart courtesy of Bloomberg

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