A liberal incumbent faces a tough challenge from a conservative rival in Croatia's presidential runoff election that is held amid deep discontent over economic woes in the European Union's newest member.

The Sunday vote is seen as a major test for Croatia's center-left government, which is facing parliamentary elections this year under a cloud of criticism over its handling of the crisis. A conservative triumph could shift Croatia back to right-wing nationalism, jeopardizing relations with its bitter Balkan wartime rival Serbia.

The vote is expected to be close. In the first round two weeks ago current President Ivo Josipovic won 38.5 percent of the vote, just edging Kolinda Grabar-Kitarovic with 37.2 percent. The runoff was called because neither candidate captured over 50 percent needed to win outright.