Political instability can severely impact economic growth by creating an environment of uncertainty and risk. Companies may hesitate to invest in a politically volatile region due to fears of nationalization, changes in regulatory frameworks, or civil unrest. This hesitance can stifle foreign direct investment and hinder domestic business growth, leading to higher unemployment and underinvestment in critical sectors. Additionally, political instability can disrupt essential services and infrastructure, further impairing economic performance. This cycle of instability can potentially lead to longer-term economic decline and reduced social welfare.