Pakistan is facing serious internal and external security threats since years. Due to the war on terrorism, the country has suffered an estimated loss of $ 14.8 billion in the past two financial years: 2014-15 and 2015-16, says the Economic Survey released in June this year. On one hand the conflict and instability in Afghanistan in the aftermath of 9/11 terrorist attacks and their regional implications have badly affected Pakistan’s economy and infrastructure and on the other, continued hostility of India towards Pakistan has deeply affected our internal and external security as well. India has sponsored many terroristic activities in Pakistan as it was confessed by the arrested RAW agent Kul Bhushan Yadav. The report says that during the past 14 years, the direct and indirect cost incurred by Pakistan due to incidents of terrorism amounted to $ 118.31 billion – equivalent to Rs 9,869.16 billion. Losses in exports were also high due to terrorism as according to the report, Pakistan recorded a loss of $ 1.88 billion – $1.08 billion in 2014-15 and $ 0.8 billion in 2015-16. Pakistan also faced huge losses in foreign investment due to the war on terror. A total loss of $ 6.60 billion was recorded in two years, $ 4.56 billion in 2014-15 and $ 2.04 in the year 2015-16. In order to tackle terrorism and extremism effectively, Pakistan has launched a 20-point National Action Plan and a comprehensive military operation Zarb-e-Azb launched against all terrorist groups without any discrimination has been remarkably successful. But unfortunately recent few attacks have raised Question Marks on security agencies all over again. Economic stability and security seems to be on stake again. More effective efforts to counter terrorism along with strong domestic political consensus and unanimity are required to eradicate terrorism in all its forms and manifestations. However, a meaningful negotiation with India, durable peace and stability in Afghanistan and the region is necessary, among other factors, for sustainable economic growth in Pakistan.