By Fredrik Dahl

TEHRAN (Reuters) - Iran will hold its 2009 presidential election on June 12, when conservative Mahmoud Ahmadinejad is widely expected to stand for a second four-year term despite criticism over his economic policies.

Iranian media said on Sunday the Guardian Council, a constitutional watchdog, and the Interior Ministry had agreed on the date, when parliament mid-term polls will also be organized.

"The 10th presidential election ... will be held on the 22nd of Khordad of next year," election headquarters head Alireza Afshar told the Fars News Agency, referring to the number of such elections in Iran since its 1979 Islamic Revolution.

The Iranian month of Khordad ends on June 21 in 2009.

Even though Iran's nuclear row with the West dominates headlines abroad, analysts predict that the economy and rising inflation in the world's fourth-largest oil exporter will be the main issues in the election campaign.

Some said Ahmadinejad may face challenges both from conservative critics and reformist rivals, but that he would have a good chance of re-election as he enjoys the apparent support of Iran's supreme leader, Ayatollah Ali Khamenei.

Ahmadinejad, who says Iran will never back down in the dispute over its nuclear program, won the 2005 vote on a pledge to share out Iran's oil wealth more fairly and to revive the values of the revolution almost three decades ago.

LEADER'S SUPPORT

He has proved a polarizing figure in Iranian politics, with some conservatives joining reformists in saying his hardline approach on the nuclear issue has further isolated Iran.

The West accuses Tehran of seeking to build atomic weapons despite Iranian denials. Iran's failure to convince world powers of its peaceful aims has led to three rounds of U.N. sanctions.

Ahmadinejad is also under fire at home from the public, the media and pro-reform opponents over his government's failure to rein in steadily climbing inflation, officially running at an annual 27.6 percent.

But he has won public support from Khamenei, the Islamic Republic's most powerful figure, who ultimately determines nuclear and other key policies. He has praised Ahmadinejad's handling of the nuclear file.

"That is an important factor," one Iranian analyst said.

The analyst, who declined to be named, said he believed Ahmadinejad was the current favorite and that he saw only moderate former President Mohammad Khatami as a potentially strong challenger, if he stands as a candidate.

Commentator Amir Mohebian said Western pressure on Iran only benefited Ahmadinejad. But he cautioned that it was difficult to know how people would vote in the absence of "exact" opinion polls in Iran.

Tehran Mayor Mohammad Baqer Qalibaf, a conservative rival of Ahmadinejad, would also stand a chance if he ran, he said.

Under the constitution, the president is Iran's second-highest official after the supreme leader, heading the government and chairing the Supreme National Security Council.

(Additional reporting by Zahra Hosseinian; Editing by Robert Hart)