People in Italy headed to the polls on Sunday in the first of two days of voting in a general election, held amid growing uncertainty about the country's economy.

Italian voters line up outside a polling station in Rome on Sunday.
(Plinio Lepri/Associated Press)

The two main contenders for prime minister are Walter Veltroni, the former mayor of Rome and leader of the Democratic Party, and billionaire media tycoon Silvio Berlusconi, who is vying for a third term in office.

Berlusconi was defeated by Romano Prodi in an election two years ago, but Prodi stepped down as prime minister in January after his centre-left coalition government collapsed.

The slowing economy will be the main challenge for the next prime minister. The main candidates have both promised to lower taxes and reduce the costs associated with running government, from the number of politicians to their salaries and perks.

Italy's public debt weighs heavily on the economy. The interest alone on the debt is the equivalent of 1,200 euros ($1945 Cdn) per year per Italian, money that is taken away from efforts to fight crime and boost infrastructure.

Both candidates cast ballots Sunday morning — Veltroni in Rome and Berlusconi in Milan.

Polls opened across Italy at 8 a.m. local time and the voting was scheduled to last until 10 p.m. Balloting resumes Monday morning until early afternoon.

Berlusconi, 71, entered the race as the front-runner, capitalizing on the unpopularity of Prodi's outgoing government, whose early collapse forced the vote three years ahead of schedule.

But Veltroni, 52, has appeared to narrow the gap, according to polls released before a pre-election ban on publishing polls took effect.

Analysts say a crucial factor might be undecided voters, representing about 15 per cent of the electorate.

With files from the Associated Press