Are Confidence and Sentiment Indicators Crucial in Forecasting the Economic Growth of Romania during the Current Crisis?

This paper outlines the importance of confidence and sentiment indicators in forecasting short-term economic growth. I used an econometric model similar to the one used by Kitchen and Monaco (2003), and I made forecasts regarding the economic growth of Romania. The model is combining different individual forecasts of GDP in order to supply a final result regarding the economic growth. I found out that confidence and sentiment indicators have a higher explanatory power as compared to other frequently used variables. Although I was not the first economist that used confidence and sentiment indicators for making projections regarding the economic growth, I consider that future research regarding forecasts of GDP should rely more on these types of indicators.