* Investor morale index falls for 2nd straight month
* ZEW sentiment 7.6 vs 14.1 in March and Rtrs poll for 11.0
* Inflation, unrest abroad weigh, but outlook still good
* German economy "seems panic-proof" to mkt -analyst
MANNHEIM, Germany, April 12 (Reuters) - German analyst and investor morale fell more than forecast in April as unease about inflation and unrest abroad weighed, a poll showed, but a strong domestic backdrop means the country's economic prospects remain healthy.
The Mannheim-based ZEW economic think tank said on Tuesday its sentiment index fell to 7.6 from 14.1 in March, the second monthly decline running and far below a consensus forecast of 11.0 in a Reuters poll of 41 analysts conducted last week.
The index was based on a survey of 291 analysts and investors and conducted between March 28 and April 11, ZEW said.
"Considerable risks may result from increasing commodity prices. These price increases could lead to second-round effects that could then force the European Central Bank to adopt a more restrictive monetary policy," ZEW President Wolfgang Franz said in a statement.
Any slowdown in Europe's largest economy could put additional pressure on fragile peripheral euro zone countries like Portugal, which are hoping nascent German private consumption can provide some demand to stimulate their ailing markets.
But robust domestic demand and a falling unemployment rate should ensure German output continues to grow at a solid rate, analysts said. "Geopolitical tensions in the Middle East and North Africa, and the disastrous events in Japan have cast doubt on the sustainability of the German recovery," said Carsten Brzeski at ING.
"So far, these doubts remain unjustified. At least in the eyes of market analysts and investors, the German economy seems to be panic-proof."
A separate gauge on current conditions rose to 87.1, the highest since July 2007 and confounding expectations for it to fall to 85.2 from 85.4 in March.
That suggested very strong growth over the first three months of 2011, while a slowdown in the spring and summer would not be a major problem, said Holger Schmieding at Berenberg Bank, who continues to forecast GDP growth of 2.8 percent over the whole year.
The ZEW was pulled lower last month for the first time since October, reflecting investor concerns over interest rate hikes by a European Central Bank wrestling with inflationary pressures.
ECB President Jean-Claude Trichet surprised markets at the start of March by signalling an imminent tightening in monetary policy earlier than had been expected, and carried through on his warning last week when he raised rates by 25 basis points. [ID:nLDE7351QH]
But while the ZEW was quick to indicate a drop-off in German growth, other monthly surveys like the Markit purchasing manager indices (PMIs) and the closely watched Ifo-index have shown little sign of an abrupt softening in economic activity.
At the weekend, Economy Minister Rainer Bruederle said the German economy was continuing to grow strongly with domestic demand gathering pace and there was no danger of high inflation on the horizon. [ID:nLDE73908V]
On Monday, French, German and Italian statistics and economics institutes jointly forecast the euro zone's economy would grow 0.5 percent in the first quarter and 0.4 percent in the second and third quarters. [ID:nPISBFE7HH]
(Reporting by Sakari Suoninen and Josie Cox, writing by Christiaan Hetzner; Editing by John Stonestreet)