Polls opened at 1130 IST with nearly 62 million voters called to cast ballots in Europe's top economy. Initial television estimates are expected shortly after booths close at 2130 IST.
After shepherding Germany through the debt turmoil, Merkel has emerged more popular than ever, proving a safe pair of hands as the crisis felled leaders in France, Greece, Italy and Spain.
Pollsters suggest that voters will re-elect the 59-year-old, whose nickname "Mutti" ("Mummy") can seem incongruous with her other often-used description as the world's most powerful woman.
"Rarely was it so close. Merkel's coalition only has a razor-thin majority in the polls," the Sueddeutsche Zeitung daily said Saturday, adding that many voters only make up their minds at the last minute.
Merkel boasts her current centre-right coalition has been Germany's most successful since reunification in 1990, enjoying a robust economy and a jobless rate of less than seven per cent.
But her stated aim for her conservative Christian Democratic Union (CDU) to stay in power with its junior partners, the pro-business Free Democratic Party (FDP), hinges on the smaller party's unpredictable fortunes.
If the alliance fails to rally a ruling majority, Merkel could be forced back into the arms of her traditional rivals, the Social Democrats (SPD), with whom she governed in a loveless "grand coalition" during her first term.
Under the watchful eye of Germany's European partners, a new eurosceptic party, the Alternative for Germany (AfD), could also prove a wild card, either by clawing enough support to send MPs into parliament or wooing disgruntled centre-right voters away.
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