BERLIN - Chancellor Angela Merkel is virtually assured of a second term in office when Germany goes to the polls next weekend but she faces a nail-biting wait to see if she can form her preferred coalition.

Some 62 million Germans are eligible to vote on September 27 in an election the will decide who is at the helm of Europe's most populous nation and biggest economy for the next four years.

Barring a major election-day surprise, polls show the 55-year-old Merkel, a pastor's daughter from the former communist east Germany and Forbes magazine's world's most powerful woman, is a shoo-in for re-election.

The key question to be resolved in Sunday's vote is whether in Germany's coalition-based political system Merkel's centre-right Christian Democrats (CDU) can win enough votes to form their preferred alliance with the business-friendly Free Democrats.

If not, Germany is in for a second term of the "grand coalition" between the CDU and the centre-left Social Democrats (SPD) -- an unwieldy alliance that some analysts say has hobbled economic reform in the recession-hit country.

The latest polls put the CDU on around 36 percent of the votes and the Free Democrats on about 12 percent, just enough to scrape a razor-thin parliamentary majority. The SPD is languishing near 26 percent, with their preferred coalition partner the Greens on around 11 percent.

"I am certain that Mrs Merkel will be the next chancellor. I do not see any alternative to her. The only interesting question is, in which coalition?" Gerd Langguth, professor of political science at Bonn university and author of a biography of Merkel, told AFP.

The election follows two broadly uninspiring campaigns waged by Merkel and her SPD rival, Frank-Walter Steinmeier, the country's 53-year-old vice-chancellor and foreign minister.

The pair, who have governed together for the past four years, have shied away from personal attacks and struggled to set themselves apart from each other as they hold joint responsibility for the administration's record.

This was evident in their one and only live TV debate during which the polite and passionless sparring prompted one exasperated moderator to exclaim: "You two are like an old married couple."

Voters have also struggled to separate the policies of the two main parties as their manifesto pledges differ only slightly on the key issues of the day, including Germany's involvement in Afghanistan and the financial crisis.

Only on nuclear energy -- where the CDU wants to go back on an earlier pledge to scrap the country's 17 nuclear power plants and the SPD wants to hold firm -- and on wage policy are there clearly defined differences.

"Mrs Merkel knows that if she is not confrontational, she can rely on her popularity as chancellor. She has the highest popularity ratings of any chancellor in German history," Langguth said.

In the early weeks, the lacklustre campaign was brightened up by Horst Schlaemmer -- a "Borat"-style mock politician -- and a party pledging, not entirely seriously, to rebuild the Berlin Wall.

But, for the men and women who will form the next government, the challenges facing Germany are anything but a joke.

The country is groggily getting off its knees after its worst recession in 60 years and output this year is poised to shrink by as much as an eye-watering five or six percent.

So far, a programme offering firms incentives to keep workers on part-time rather than lay them off has kept a lid on unemployment, but experts see jobless lines growing rapidly in the coming months.

In the foreign policy sphere, politicians face an increasingly uphill battle to convince the public their country needs to stay the course in the deeply unpopular mission in Afghanistan.

A more pleasant task for the new chancellor will be welcoming a host of world leaders on November 9 to celebrate the 20th anniversary of the fall of the Berlin Wall which paved the way to a reunited Germany.

One leader not attending the celebrations is US President Barack Obama, who will be at a summit in Asia.

But this did not stop Obama "calling" the election back in July.

On the way to a joint press conference in Washington, Merkel told Obama she was preparing her election campaign.

Turning to Merkel with a grin, Obama was caught on cameras as saying: "Oh, you've already won. I don't know why you're always worrying."