Sweden's leftwing opposition bloc held a razor-thin lead in Sunday's general election with half of votes counted, with the far right seen losing ground.
With more than 50 percent of votes counted, four opposition parties led by Social Democratic leader Magdalena Andersson, had a narrow lead with 49.3 percent against 49.1 percent for Prime Minister Ulf Kristersson's right-wing alliance, which includes the anti-immigration Sweden Democrats.
In a big surprise, the anti-immmigration Sweden Democrats lost support for the first time since it entered parliament in 2010, with 17.7 percent of the vote, down from 20.5 percent in 2022.
"Of course it's a bit of a disappointment that we are not the second-biggest party anymore in these polls. But it's still not finished, it can still change," Julia Kronlid, a Sweden Democrat member of parliament, told AFP just after exit polls had showed the party retreating.
Experts predicted the race could go down to the wire.
In the event of a left-wing victory, the four parties would face tough negotiations to form a government as they are splintered ideologically.
"I am confident that Magdalena is a skilled negotiator, and that she has a plan to make it work... It might take a bit of time, but we will get a government led by Magdalena," Emilia Wikstrom Melin, a 40-year-old union analyst, told AFP at the Social Democrats watch party.
Kristersson has headed a minority coalition backed by the Sweden Democrats for four years, giving the far-right influence over policy in exchange for support in parliament.
Kristersson promised the Sweden Democrats key cabinet posts if the right wing wins.
"It would be really tough for the country to go back to four years of the Social Democrats in power," Sweden Democrat supporter Bjorn Englen told AFP.
Throughout the campaign, opinion polls gave a comfortable lead to the left-wing opposition, but the gap narrowed to a dead heat in the final days.
Much of the campaign focused on healthcare and helping struggling households cope with rising costs.
Andersson, the first woman to head Sweden's government in 2021-2022, is a staunch defender of Sweden's famed welfare state.
Her party ruled the Scandinavian country for most of the 20th century and remains Sweden's largest, though early results showed the party heading for its worst result in modern history.
Andersson has pledged to raise taxes on banks and high incomes, cut healthcare queues, and improve declining school results.
"We've had four years of rising unemployment, with a salary that pays for less and less," she said in a televised debate before the vote.
Adding a touch of star power to election day, ABBA's Benny Andersson performed at her party's headquarters in Stockholm, changing the lyrics of their hit song "Mamma Mia" to "Mag-da-le-na!".
Outgoing prime minister Kristersson meanwhile vowed to focus on improving Swedes' everyday lives now that his government's clampdown on organised crime and immigration was starting to show results.
Deadly shootings and bombings by organised crime networks have fallen sharply in recent years, while asylum applications are at a record low.
"We want to use our new and far better preconditions to improve the lives of ordinary people... to make Sweden great again," Kristersson told AFP before the vote, borrowing US President Donald Trump's trademark slogan.
Over the past two decades, far-right leader Jimmie Akesson has steered the party with neo-Nazi roots into the mainstream.
"Sweden is becoming safer, better, and more Swedish," Akesson told a campaign rally on Saturday, surrounded by blue-and-yellow "Make Sweden Sweden Again" posters.
At a polling station on Sunday, store manager Linda Eriksson, 48, told AFP she hoped for a change of government.
"Hopefully a lot of people will realise that we have to change course... so that everyone will feel included in society," she said.
Swedish climate activist Greta Thunberg had urged voters to "vote out Tido", referring to the right-wing government's alliance with the far-right.
"No fascists in our government. Climate justice now!" she wrote on Instagram.
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