* LatAm stocks down 0.7%, FX flat

* Survey shows Brazil's Lula widens lead over Flavio

Bolsonaro ahead of presidential vote

* Chile's finance ministry forecasts 3% GDP growth in 2027

and 2028

(Updates with afternoon levels)

By Avinash P and Ragini Mathur

June 10 (Reuters) - Latin American stocks fell on Wednesday

as renewed tensions between the U.S. and Iran added to the

economic uncertainty, while investors also monitored the

extremely tight presidential election in Peru and other

political developments across the region.

U.S. President Donald Trump said that Washington would

strike Tehran again if no peace deal is reached, threatening

further escalation after one of the most significant exchanges

of hostilities in two months.

The latest flare-up has added another obstacle to a

potential Middle East peace deal and revived concerns that a

closure of the Strait of Hormuz could drive oil prices higher,

worsen inflation and weigh on global growth.

U.S. consumer inflation rose in May at its fastest pace in

three years. While the reading matched economists' expectations,

it reinforced expectations that the Federal Reserve will keep

interest rates steady. Treasury yields edged higher after the

data, while the dollar was little changed.

The MSCI index of Latin American stocks fell

0.7%, while the corresponding currencies gauge

was largely flat.

"The combination of higher yields, weaker commodities and

renewed Iran headlines is hurtful for Latin American market

dynamics," said Alejandro Cuadrado, Latin America strategist at

BBVA.

REGIONAL POLITICS ADD TO CAUTION

In Brazil, President Luiz Inacio Lula da Silva widened his

lead over Senator Flavio Bolsonaro ahead of the presidential

election in October, recovering ground after reports linked the

right-wing challenger to a disgraced banker, a poll showed.

Lula would win a potential second-round runoff against

Flavio by 44% to 38%, according to a Quaest poll commissioned by

brokerage Genial. In May, Lula led by a much narrower 42% to

41%.

"This is going to be a tight election, and we are a bit far

out to make a decisive market call based purely on politics,"

Cuadrado said.

Brazil's benchmark Bovespa index fell 0.8%, weighed

down by a 1.1% drop in miner Vale. The real

was nearly flat.

In Peru, investors remained focused on an exceptionally

tight presidential race, with leftist Roberto Sanchez leading

conservative rival Keiko Fujimori by just over 40,000 votes.

Peru's stock benchmark rose 0.2%, after

posting its biggest one-day gain since late 2023, while the sol

weakened 0.3%.

Colombia is also heading toward a presidential vote. Leftist

presidential candidate Ivan Cepeda told Reuters he will

recognize the results of a runoff vote on June 21 even if they

do not favor him. He is set to face right-wing lawyer Abelardo

De La Espriella.

Colombian equities gained 0.5%, while the peso

appreciated 0.6% against the dollar.

In Mexico, stocks fell 0.9%, while the peso

edged 0.2% lower. The Bank of Mexico said that the financial

system remains resilient and has the capacity to withstand

adverse scenarios, while flagging geopolitical conflicts as

risks to monitor.

Chile's main stock index slipped 0.2%, while the

peso strengthened 0.4%. The country's finance ministry

issued new GDP forecasts, projecting growth of 3% in both 2027

and 2028, rising to 3.5% by 2030.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1667.76 -2.57

MSCI LatAm 2865.76 -0.72

Brazil Bovespa 168485.06 -0.78

Mexico IPC 64834.96 -0.88

Chile IPSA 10479.48 -0.23

Argentina MerVal 3164310.86 0.43

Colombia COLCAP 2264.03 0.52

Currencies Latest Daily % change

Brazil real 5.1731 -0.03

Mexico peso 17.4038 0.2

Chile peso 912.61 0.39

Colombia peso 3547.5 0.58

Peru sol 3.3995 -0.31

Argentina peso 1,433.0 0.69

(interbank)

Argentina peso 1,430.0 2.05

(parallel)