Industrial production in France fell by 0.6 percent in July, after a drop by 1.4 percent in the previous month, according to latest figures released by the French statistics agency, INSEE, Tuesday.

The factories' decline was most pronounced in the manufacturing industry, INSEE figures showed, which shrank 0.7 percent in the year-on-year comparison.

France's automobile industry, for example, slumped more than 11 percent in spite of a tentative recovery in European car sales this summer.

The slowdown in industrial production is a damper on hopes for a return to robust growth in Europe's second-largest economy, which had just emerged from a recession in the second quarter of 2013. Furthermore, it casts doubt on a government growth forecast of 0.2 percent expansion in the third quarter.

Meanwhile, France's sluggish economy appears set to increase the country's public deficit more than previously expected.

On Tuesday, Finance Minister Pierre Moscovici told a national radio station that the public deficit in 2013 might turn out higher than the previously estimated 3.7 percent of gross domestic product (GDP).

Moscovici attributed the rise to difficult economic conditions and lower tax income for the government.

In spring this year, the European Commission gave France until 2015 to drive its budget deficit below the EU target of 3 percent of GDP. However, the EU's executive arm also called on the country's Socialist president, Francois Hollande, to introduce economic reforms.

uhe/kms (AFP, Reuters)