TUNIS  - Tunisia needs to reform its fuel subsidies and cut its budget deficit, the International Monetary Fund (IMF) said on Friday after a mission visited the country.

"Staying the course on reducing the fiscal deficit this year and next is critical to stabilise debt and reduce excessive demand for imports given the recent increase in global oil prices," the IMF said in a statement.

The two sides reached an initial, or "staff level", agreement on the next reforms, the statement added.

(Reporting by Ulf Laessing Editing by Gareth Jones ) ((Ulf.Laessing@thomsonreuters.com))