Crisis-stricken Cyprus cut its public deficit to 4.9 percent in 2012, compared to a shortfall of 6.1 percent in 2011, according to a Ministry of Finance statement issued on Monday.

The statement said last year's deficit was lower than the revised target of 5.8 percent promised to international lenders. Cyprus has made an undertaking to further reduce its deficit this year to 3.3 percent and completely wipe it out in 2014.

Cyprus has negotiated a preliminary bailout deal with the troika -- the European Commission, the European Central Bank and the International Monetary Fund -- providing for deep cuts in salaries and pensions and hikes in taxes.

The ministry statement said expenditure in 2012 fell by 212.6 million euros (283 million US dollars) as a result of lower spending.

The deal has yet to be finalized, pending establishment of the amount needed for recapitalizing the banking sector following heavy losses on account of its exposure to Greek debt.

Cyprus and the troika disagree on the recapitalization amount even after Pimco investment services firm, jointly commissioned by the government and the troika, carried out a due diligence of the banks.

The troika insists on findings based on an extreme case scenario which raises the required amount to over 10 billion euros (13.3 billion dollars). Cyprus is asking for a baseline scenario to be applied which leads to a lower amount, in an effort to keep the sovereign debt down to a sustainable level.

Final details of the bailout agreement will be negotiated by the government to take office after a runoff presidential election on Feb. 24.

Right-wing candidate Nicos Anastasiades is tipped to win the election after obtaining a commanding lead over his leftist challenger, Stavros Malas, who is supported by the current governing party, AKEL.

Anastasiades obtained 45.46 percent of the vote in Sunday's first round elections, against 26.91 percent for Malas.

In a related development, Cyprus Central Bank said on Monday it will seek authorization from the troika to officially inform the banks about the amount each one will need for recapitalization, in a move to protect both the banks and investors.