What is the impact of political instability on economic growth? 🔊
Political instability profoundly impacts economic growth by creating an unpredictable environment for investment and business operations. It can lead to capital flight, reduced consumer confidence, and hindered trade. Investors tend to shy away from regions with high levels of volatility, which stunts development and infrastructure improvements. Additionally, instability can cause disruptions in essential services and social unrest, exacerbating poverty levels. Over time, persistent instability can entrench economic challenges and perpetuate a cycle of underdevelopment and vulnerability.
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