Initial projections in Austria's presidential race on Sunday showed Green party candidate Alexander Van der Bellen to be neck and neck with his far-right rival Norbert Hofer, with the close race highlighting the deep political divisions in the country.

With 92 per cent of the ballots counted, Van der Bellen and Hofer were both projected to receive 50.0 per cent of the votes, the SORA polling institute said.

The final results are expected on Monday, once all absentee ballots have been counted.

The election reflects a widening division in Austrian society between those who have welcomed the arrival of tens of thousands of refugees since last year, and those who fear that the influx threatens their standard of living.

A win for Hofer would further strengthen the anti-immigration and EU-sceptic populist movement in Europe as the region faces an ongoing refugee crisis and Britain's upcoming referendum about its membership in the European Union.

Hofer, who currently serves as a vice president of parliament, entered the final election as the favourite, after the 45-year-old won the first round in April.

Van der Bellen, a 72-year-old former Green party leader, came in second in April. Although he runs as an independent, his campaign was financed by the Greens.

"It's a photo finish," Van der Bellen's campaign manager Lothar Lockl said.

The Freedom Party's eurosceptic and anti-immigration stance is embodied by other populist parties in Europe, which means the Austrian presidential race has drawn an unusual amount of attention abroad - especially in neighbouring Germany, where the right-wing Alternative for Germany (AfD) enjoys growing support.

Van der Bellen has been stressing the importance of having a stable and unified European Union and of maintaining a humane refugee policy.

Hofer, on the other hand, wants a less centralized European Union and more public referenda in Austria - a move that would follow the example of neighbouring Switzerland, where the right-wing People's Party has pushed a xenophobic agenda through referendum campaigns.

Austrian presidents ultimately fulfill a mostly ceremonial role, and neither Van der Bellen nor Hofer would be able to change national policies.

Van der Bellen and left-wing commentators have warned that a vote for Hofer could pave the way to a Freedom Party government, given that the opposition rightists have been leading in national polls for the past year.

Austria's sitting Social Democratic president Heinz Fischer is scheduled to hand over his office to his successor on July 8.

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