Wednesday's ballot pits the ruling conservative Croatian Democratic Union (HDZ) led by Prime Minister Andrej Plenkovic against an alliance of centrist and left-wing parties informally led by populist President Zoran Milanovic and his Social Democratic Party (SDP).

The election is being held as Croatia struggles with the highest inflation rate in the eurozone, a labour shortage, illegal migration, and reports of widespread corruption.

At stake in the race for Croatia's 151-seat parliament is not just the Adriatic Sea country's future domestic policies but also the EU's unity as it grapples with the instability from Russia's invasion of Ukraine.

If the HDZ stays in power, the country would continue a pro-Western course in supporting Ukraine in its fight against Russia.

A success for SDP could put it on track for victory in the European Parliament elections in June and the presidential election in December.

It would shake the HDZ's long dominance of politics and potentially open space for stronger pro-Russian influence in the country, akin to Hungary and Slovakia.

Polls close on Wednesday evening and official results are expected on Thursday.

Most pre-election polls predicted a victory for the HDZ, but without enough seats to rule alone.

The left-wing opposition might benefit from discontent with the country's high inflation and the general economic malaise in most EU member states.

The HDZ has largely held power since Croatia gained independence from the former Yugoslavia in 1991.

The Balkan nation became the newest member of the European Union in 2013, and joined Europe's passport-free travel area and the eurozone in 2023.

The president holds a largely ceremonial role in Croatia, while the prime minister exerts most of the political power.

The election has played out as the final episode in the long-running rivalry between Plenkovic and Milanovic.

After Milanovic scheduled the election and announced his surprise bid for prime minister, he began campaigning on behalf of the SDP.

But Croatia's constitutional court judges stepped in, saying the move was unconstitutional.

They said the president could not run for prime minister, take part in the parliamentary election or campaign in favour of any party unless he first resigned.

Milanovic refused, openly ignoring the top court and continuing to campaign in favour of the left-wing alliance.

He accused Plenkovic and the HDZ of rampant corruption and "massive theft" of state funds.

Plenkovic, who has led the government since 2016, repeatedly denied the accusations, saying Milanovic as prime minister would shift the country away from the EU and closer to Russia.

Milanovic has often voiced a pro-Russian stance during the war in Ukraine and criticised EU's policies over Ukraine.

Australian Associated Press