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By Anna Willard
PARIS, Dec 10 (Reuters) - French industrial production posted its largest annual fall on record in October, dragged down by the struggling car industry and adding to a grim outlook for fourth quarter growth.
Output fell 7.2 percent on an annual basis, the largest drop since January 1991 when the series began, national statistics office INSEE said on Wednesday.
The month-on-month number was down 2.7 percent, the biggest decline since May and far worse than the consensus forecast for a fall of 0.6 percent.
"It's a catastrophe. I thought we would have a big fall but obviously I did not imagine that it would be as catastrophic," said Dominique Barbet, economist at BNP Paribas.
"I had a forecast of -0.5 percent (for gross domestic product in the fourth quarter) but now we will have to think about revising that downwards.
The economy grew just 0.1 percent in the third quarter and economists are widely expecting the economy to tip into recession next year.
Output in the troubled car industry tumbled 14.3 percent, the largest decline since August 1999, with firms halting production in many factories following a slump in sales.
"The main problem out there is the auto sector. With the closing down of factories in December and January the drop could reach 20 to 25 percent month-on-month, which is really huge," said Alexander Law, chief economist with consultancy Xerfi.
The government estimates France's car industry accounts for about 10 percent of the work force or around 2.5 million jobs.
France's second largest carmaker Renault
President Nicolas Sarkozy last week unveiled a 26 billion euro ($33.76 billion) stimulus package to boost the economy including steps to help the car industry.
Other countries are also facing difficulties in the car industry as consumers prefer to have old vehicles repaired than splash out on new ones.
In the United States, the House of Representative could vote as early as Wednesday on a $15 billion plan to bail out U.S. automakers, although the plan may face roadblocks in the senate.
Outside the car sector, the French report also had worrying news for other sectors of the economy. Production of consumer goods fell 0.4 percent, capital goods tumbled 0.5 percent and intermediary goods declined 3.5 percent. (Additional reporting by Brian Rohan and Veronique Tison, editing by Mike Peacock)