The objective of the study is to examine the key determinants of Terrorism and its Impact on Economic Growth in case of South Asian Region. Panel data is used for the period of 1985-2018 for selected south Asian countries. Terrorism affected adversely most of the world’s regions since the start of the 1980s. The main issues which are faced by these countries are related to political or economic aspects like poverty, inflation, unemployment and repression. In present study we used the role of macroeconomic factors of terrorism. The study comprised of balance panel data and employed Fixed Effect Model to analyze the determinants of terrorism in such a way that characteristics of each country can be taken into account. The findings of the study suggest that higher literacy rate determines terrorism, as confirmed by many studies, because the more  people are educated the more knowledge they may have for making plans or strategies similarly, unemployment is not leading terrorism showing that more the people involved in terrorism are employed or experienced. A terrorist act destroys the infrastructure; people are afraid to move for their work in a terrorized society these results in low production and makes demand greater than supply consequently high inflation rate so economy has to pay higher economic cost in any form.