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ZAGREB (Reuters) - Croatia's parliament approved a new economy minister on Friday after Deputy Prime Minister Radimir Cacic, who was also in charge of reviving the economy, was sentenced to jail in Hungary over a car crash.

Ivan Vrdoljak, 40, will take over the ministry tasked with making Croatia's economy more competitive as it heads for European Union entry next July. The economy has not grown for four years.

Cacic, seen as a major driving force in the efforts to bring back growth, quit on Wednesday after a Hungarian court sentenced him to 22 months in prison for causing a fatal car crash in early 2010.

Vrdoljak, whose party is a junior partner in the 11-month-old center-left coalition, has been minister of construction and urban planning and some analysts fear he may lack Cacic's political clout.

"However, I expect no policy changes as the new minister has little maneuvering space but to continue with trying to make Croatia a more investment-friendly environment," said Zdeslav Sentic, an analyst from Raiffeisenbank.

Vrdoljak is an electrical engineering graduate who speaks English and has worked for a software company in Brazil. He joined the government in late 2011.

Croatia hopes to reach gross domestic product (GDP) growth of 1.7 percent in 2013 by boosting the private sector and investing in energy and transport infrastructure.

Foreign investment in Croatia has dwindled in recent years and investors have voiced discouragement over red tape, an inflexible labor market, high employment taxes and frequently changing tax rules.

Foreign Minister Vesna Pusic, a party colleague of Cacic, will take over his role as deputy prime minister in the Social Democrat-led cabinet.

(Reporting by Igor Ilic; editing by Zoran Radosavljevic and Ruth Pitchford)

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