Achieving sustainable economic growth under resource constraints is a critical challenge in arid regions such as Razavi Khorasan Province, where severe groundwater depletion threatens long-term development. Agriculture consumes over 80% of the province’s water, raising questions about whether it truly functions as an economic engine. This study aims to identify the province’s key driving sectors using a hybrid analytical framework that integrates a Regional Input-Output Table (RIOT) with the DEMATEL multi-criteria decision method. This approach enables simultaneous micro- and macro-level analysis while linking results to the Water-Energy-Food (WEF) Nexus.

The RIOT for 2020 was constructed using the FLQ-RAS method based on national accounts and aggregated into 13 sectors. Objective technical coefficients from the input-output matrix were used directly in DEMATEL to evaluate sectoral influence and causal relationships. Findings reveal heavy reliance on groundwater (96%), with crop and horticultural production accounting for the majority of withdrawals, while reclaimed water use remains negligible. However, backward linkage analysis shows that the food, tobacco, and beverage sector has the strongest economic multiplier effect (2.57), meaning demand growth in this sector generates significant economy-wide output. DEMATEL results confirm that food processing industries, livestock and poultry, fisheries, construction, and crop/horticulture are the most influential sectors. Although other services account for the largest GDP share, their systemic influence is limited.

Within the WEF framework, the food macro-sector ranks highest, highlighting the importance of value-added and technology-intensive food industries rather than traditional crop production. Water and energy sectors primarily serve infrastructural roles. Policy implications suggest shifting investment priorities toward high-value food processing and modern, resource-efficient agriculture, alongside integrated water and energy management. Reforming subsidies that encourage overuse of water and electricity is also essential. Future research using Environmental Input-Output models could provide deeper insight into sustainability by explicitly accounting for physical resource flows