* Poland one of few countries in Europe to see growth in Q1
* Weak zloty helps exports, domestic demand declining
* Economy's prospects closely tied to euro zone recovery
(Adds prime minister, finance minister)
By Adrian Krajewski and Pawel Sobczak
WARSAW, May 29 (Reuters) - Poland bucked the European trend in the first quarter of 2009 by posting modest year-on-year economic growth, data showed on Friday, but analysts said further expansion would hinge on recovery in the euro zone.
Economic growth stood at 0.8 percent in the first quarter, the statistics office data showed, slightly below market expectations of 1 percent and well below the 2.9 percent growth recorded in the fourth quarter of 2008.
Prime Minister Donald Tusk, keen to reassure voters on the economy ahead of June's European Parliament elections, hailed the data as vindication of his government's prudent policies.
"This data clearly points to Poland's resilience and the effectiveness of our efforts to protect Poland from the impact of the global crisis," Tusk told a news conference.
His centre-right government is one of the few in the EU boasting a strong lead over its rivals amid the economic gloom.
Economists also took heart from the GDP figures.
"The data are positive, especially when we look at the region (of eastern Europe) where none of the countries posted growth in the first quarter," said Ernest Pytlarczyk, head of financial market research at BRE bank in Warsaw.
The data showed investments rose by 1.2 percent year-on-year, while domestic demand was down 1.0 percent and private consumption grew by 3.3 percent.
"Exports are behind the growth... Good exports are a result of the weaker zloty in the first quarter," said Tomasz Kaczor, chief economist at BGK Bank.
"GDP growth in coming quarters depends on the European economy. If exports slow then we are going to see contraction of the economy," said Kaczor.
Recent data showed the euro zone economy sank in the first quarter of this year by 2.5 percent quarter-on-quarter for a 4.6 percent contraction year-on-year -- the worst on record.
GLOOM AMONG NEIGHBOURS
Germany, the biggest economy in the 16-nation single currency area and Poland's biggest export market, led the plunge with a 6.7 percent annual drop.
The Czech Republic, which like its much bigger neighbour Poland had been weathering the global crisis relatively well, posted a 23.2 percent annual drop in industrial output in April, data showed on Friday, overshooting a 19 percent forecast.
Rising unemployment in Poland will weigh on consumption in the months ahead, said London-based Capital Economics in a note.
"That said, Poland is one of the few countries in Europe not to have entered recession... (and) Poland is much better placed than many in the region to weather the turmoil," it added, due to its smaller reliance on exports and on foreign capital.
Finance Minister Jacek Rostowski said economic growth in 2009 could come within a range of 0.0 to 0.5 percent, well below his previous "worst case scenario" of 1.7 percent.
A member of the central bank's 10-strong Monetary Policy Council, Andrzej Slawinski, said he expected Poland's economic growth to stand close to zero for the whole of 2009 and then accelerate to 2 percent in 2010.
In a recent Reuters poll, analysts predicted economic growth this year of 0.8 percent, down from 4.9 percent for 2008.
Poland's central bank has cut interest rates by 225 basis points since November to offset the downturn, though this week it kept the main rate unchanged at 3.75 percent for a second month running due to fears over inflation and the weak zloty.
Analysts said Friday's data opened the way for further monetary easing. Many expect a 25 basis point rate cut in June. "It is difficult to rule out further interest rate cuts because the economy could end up being in a worse state than we now predict," said Slawinski, seen as one of a group of swing voters on the council who often hold the balance of power on interest rate decisions.
A second MPC member also seen as a moderate, Jan Czekaj, told Reuters the Council remained in rate-easing mode but said this might change after the bank's new inflation projection due in June. (Writing by Gareth Jones, editing by Patrick Graham and Andy Bruce)