"It should be in the first year that there are lots of reforms that you have to do, we missed the chance, because we thought growth would arrive two years earlier," he told CNBC.
Vrdoljak said he had struggled to push through reforms in the first year of his tenure as economy minister because of the coalition government with the social democrats, who were opposed to free-market reforms.
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"We have been part of Yugoslavia, then we had the war. After that we changed the logic of the economy from regional to the European opportunities. That is why it takes so long," he said.
As the European Union's newest member, Croatia, along with Cyprus will be the only nations where growth won't be positive in the bloc this year, the European Commission (EC) said in its spring forecast earlier this year.
The EC said the "downward drift" in the country continues with "no firm growth model is yet in place" as real GDP fell by 1 percent in 2013, confirming the fifth year of recession.
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"In 2014, real GDP is forecast to decline by 0.6 percent," the Commission said, adding that "the expectation of a muted recovery in 2015 hinges on external demand."
He expects the economy to stagnate this year and show growth from next year, adding that the "re-industrialization" of the country was essential for growth and employment.