Results with 95% of ballots counted showed Basescu had won 50.43%, versus 49.57 for Social Democrat leader Mircea Geoana, the Central Election Bureau said.
The vote is one of the most important for the Balkan state since it executed Stalinist dictator Nicolae Ceausescu 20 years ago, as the victor must name a new government that can restart talks over a stalled 20-billion-euro rescue loan deal.
The victory is a surprise comeback for Basescu, who trailed Geoana by eight percentage points in the last two opinion polls before the vote after the leftist forged a pact with the third-largest party, the Liberals, to rule together if he won.
Analysts said once confirmed, Basescu, who was a merchant ship captain in the 1980s, could struggle to form a government with the other major parties with whom he has repeatedly clashed during his five year term.
"Theoretically, President Basescu cannot lose these election given the current figures," said Adrian Basaraba, head of the department of political science at the University of Timisoara.
"It will be much harder for Basescu to form a government."
Late on Sunday, most exit polls showed Geoana winning.
But Basescu appeared to win most of around 150,000 ballots cast among the more than two million Romanians living abroad in countries like Spain, Italy and Moldova and the United States, who backed him heavily in the 22 November first round which he won (EurActiv 23/11/09).
(EurActiv with Reuters.)
