* ZEW posts first fall in 9 months, tempering recovery hopes
* Credit crunch concerns weigh on analyst sentiment
* Current conditions gauge posts second straight gain
(Adds economist quotes, background)
MANNHEIM, Germany, July 14 (Reuters) - German analyst and investor sentiment fell in July for the first time in nine months, weighed down by worries that tighter credit could choke off a recovery in Europe's largest economy.
Optimism about the German economy has grown in recent weeks, with data pointing to a stabilisation in the manufacturing sector and government officials saying gross domestic product (GDP) could be flat or slightly higher in the April-June period, breaking a string of four straight quarters of contraction.
But the Mannheim-based ZEW economic think tank's monthly index of economic sentiment fell on Tuesday to 39.5 from 44.8 in June, the first drop since October 2008.
The euro
ZEW economist Michael Schroeder said survey respondents were concerned about the risks of a credit crunch despite lending figures showing this was not a problem at the moment.
"A considerable risk for the future development of the German economy is whether lending to firms and households works out," ZEW said in a statement.
Surprisingly robust industrial orders and output data last week boosted recovery hopes after months of gains in corporate and investor sentiment. Output grew in May at its fastest rate in 16 years and orders surged to a near two-year high.
The ZEW index remained above its historical average of 26.3 and a separate gauge of current conditions posted its second straight gain after eight months of decline, inching up to -89.3 from -89.7.
But the reversal in the headline index reminded observers that any recovery is likely to be gradual.
"The worsening labour market and a high level of uncertainty are a good reminder that cautious optimism not enthusiasm is most suitable for the way forward," said Carsten Brzeski from ING Financial Markets.
"The stabilisation of the German economy is underway but it will not be as strong as latest data could make us believe," he added.
The index was based on a survey of 289 analysts and investors and conducted between June 29 and July 13, ZEW said.
The consensus forecast in a Reuters poll of analysts last week was for a rise to 47.8.
A separate gauge of current conditions rose slightly to -89.3 from -89.7. A reading of -88.0 had been forecast.
(Reporting by Krista Hughes, writing by Brian Rohan)