* Brazil"s 2021 inflation outlook jumps to 5% - survey * Mexican peso drops as economy shrinks more than expected * Chilean peso surges on copper prices, pension reform hopes (Recasts with Peruvian sol, updates prices) By Shashank Nayar and Ambar Warrick April 26 (Reuters) - Peru"s sol currency tumbled to record lows on Monday as a weekend poll showed a strong lead for socialist presidential candidate Pedro Castillo, while Brazil"s real rose as high inflation pointed to tighter monetary policy. The sol dropped as much as 1.5% to a record low of 3.8428 to the dollar, extending losses into a seventh session as Castillo appeared poised to take the presidency later this year. It ranks among the worst performing Latin American currencies this year, despite a jump in copper prices, which usually benefit the currency of the world"s no. 2 producer of the red metal. Colombia"s peso was set for its worst day in nearly five months, tracking a tumble in oil prices as a COVID-19 outbreak in major importer India hurt demand expectations. Mexico"s peso fell 0.3% as the country"s economy shrank more than expected in February, mainly driven by weakness in the manufacturing and service sectors, the national statistics agency INEGi said. Sentiment over Latam currencies and assets remains on the ropes, undermined by a vaccine shortage to protect against a widely disruptive wave of COVID-19 infections. The resurgence has stalled an ongoing economic recovery. On the other hand, Chile"s peso firmed 1.1%, tracking a sharp rise in copper prices as they hit decade highs. Chilean President Sebastian Pinera said the government will launch its own bill to allow citizens to draw more from their private pensions. Brazil"s real firmed 0.9% against the dollar after a survey of economists showed Brazil"s 2021 inflation outlook rose to 5% for the first time and the interest rate outlook hit a new high of 5.5%, a sign that the central bank will raise rates aggressively at its next policy meeting. The bank"s rate-setting committee known as "Copom", which is set to meet on May 4 and 5, is widely expected to repeat last month"s landmark 75 basis point hike, which would lift the benchmark Selic rate to 3.50%. "The BCB (Central Bank of Brazil) has all but committed to another 75 basis point hike, and we would want to see the BCB restrain itself from shifting its tone more explicitly to the dovish side given growth dynamics," said analysts at J.P. Morgan. "This would be positive for the Brazilian real and could lead to further outperformance, should Covid cases decline and the BCB remain on the hawkish side." Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1361.55 0.63 MSCI LatAm 2430.08 0.54 Brazil Bovespa 120535.81 0 Mexico IPC 48933.60 -0.32 Chile IPSA 4870.19 0.64 Argentina MerVal 47944.78 1.204 Colombia COLCAP 1287.49 0.41 Currencies Latest Daily % change Brazil real 5.4491 0.86 Mexico peso 19.8690 -0.27 Chile peso 703.9 1.11 Colombia peso 3693.13 -1.79 Peru sol 3.8377 -1.32 Argentina peso 93.2700 -0.15 (interbank) (Reporting by Shashank Nayar in Bengaluru; Editing by Angus MacSwan and Alistair Bell)