Europe

Poland awaits Moody's review as numbers show economy shrank

FILE - In this March 14, 2012, file photo, Ling Jihua, a loyal aide and confidante to President Hu Jintao, is seen as Chinese President Hu Jintao signs a document after attending the closing ceremony of the National People's Congress at the Great Hall of the People in Beijing. Chinese prosecutors have indicted the former top aide to ex-President Hu Jintao on charges of taking bribes, illegally obtaining state secrets and abuse of power, state media reported Friday, May 13, 2016 in the latest high-profile blow in President Xi Jinping's sweeping crackdown on corruption. (AP Photo/Andy Wong, File)

FILE - In this March 14, 2012, file photo, Ling Jihua, a loyal aide and confidante to President Hu Jintao, is seen as Chinese President Hu Jintao signs a document after attending the closing ceremony of the National People's Congress at the Great Hall of the People in Beijing. Chinese prosecutors have indicted the former top aide to ex-President Hu Jintao on charges of taking bribes, illegally obtaining state secrets and abuse of power, state media reported Friday, May 13, 2016 in the latest high-profile blow in President Xi Jinping's sweeping crackdown on corruption. (AP Photo/Andy Wong, File)  (The Associated Press)

Government statistics show that Poland's economy contracted slightly in the first quarter after years of continuous growth, bad news that comes ahead of a possible downgrade by the ratings agency Moody's later in the day.

Poland has been one of Europe's most dynamic economies for years, with an economy on track to grow at around 3.5 percent this year despite the weak first quarter growth. But investor confidence has been shaken by a new government that has weakened the independence of key state institutions and is increasing welfare spending.

Standard & Poor's already downgraded Poland a notch earlier this year, something the government slammed as unfair due to the growth.

The Central Statistical Office said the economy contracted 0.1 percent quarter-on-quarter and that yearly growth was at 3 percent.