The International Monetary Fund on Wednesday published its analysis of Burma for the first time since 1999, applauding recent reforms but stressing the need to move further to stabilise the economy.

It said Burma’s economy, coming out a long period of stifled activity under an autocratic military regime, would grow about 5.5 percent this fiscal year, ending in March, and 6.0 percent the next.

But it said reforming the “complex” exchange rate system is a top priority, and that will need to come with other broad adjustments and management reforms to maintain macroeconomic stability.

“The new government is facing a historic opportunity to jump-start the development process and lift living standards,” the head of the IMF mission to Burma said in a statement.

Long a pariah in Western eyes, the country has taken strides toward democracy since a nominally civilian government took over last March from a military junta year that had ruled the country for half a century.

“Myanmar [Burma] has a high growth potential and could become the next economic frontier in Asia,” said IMF mission chief Meral Karasulu, whose team conducted an evaluation of the economy earlier in the month.

“If it can turn its rich natural resources, young labour force, and proximity to some of the most dynamic economies in the world, into its advantage,” she said.

The IMF in particular called on the authorities to step up reforms to enhance the business and investment climate, modernise the financial sector, and further liberalise trade and foreign direct investment.

It stressed the need for a sweeping change in foreign exchange and currency management as the country opens up.

It said the rapid appreciation of the kyat currency is “primarily due to large foreign inflows into the economy, which cannot find an outlet due to exchange restrictions on current international payments and transfers.”