WASHINGTON (Reuters) - Myanmar's economy should grow 7.8 per cent in the fiscal year ending March 31, less than the previous year, due to a slowdown in its agricultural sector, the International Monetary Fund said on Wednesday.

The IMF said risks to Myanmar's economy have increased since the fund's analysis last year. Government plans to raise public sector wages could spur inflation, while central bank reserves are vulnerable to a slowdown in foreign direct investment or capital inflows, it noted.

"Prioritizing spending and increasing tax revenues will be imperative to contain (next year's) budget within the authorities' target of 5 percent-of-GDP deficit," Yongzheng Yang, the IMF's mission chief for the country, said in a statement.

Myanmar's economy grew 8.3 per cent in fiscal 2013, its biggest economic expansion in six years, after the country moved away from military rule that began in 1962 and re-engaged with the international community.

Parliamentary elections later this year will be the first since President Thein Sein embarked on landmark reforms in 2011.

The IMF warned that increasing government wages too much could reduce funds for health, education and infrastructure investments, and urged the government to keep wage hikes in line with tax revenues and growth in productivity.

But the fund said Myanmar was making progress in modernizing the financial sector, and praised the move to start selling government debt via an auction system last month, the latest reform to the country's fledgling economy.