The public debt fell by €14.5 billion ($19.2 billion) from the reading in June, or by 1.1 percentage point, to €1.8 trillion or 89.9 percent of gross domestic product (GDP), still far above the EU limit of 60 percent, the official figures showed.
An INSEE statement put the improvement down for the most part to a decrease in debt by national government administrations, which along with social security spending and local administrations comprises the public accounts.
Spending on social security programmes edged lower by a much more modest €1.1 billion, while local spending increased by 400 million.
The government had forecast public debt equal to 89.9 percent of GDP at the end of the year, but also expects it to increase next year to 91.3 percent before declining again in 2014 and 2015.
Meanwhile, household confidence gained an indexed two points from the level in November to 86 points, a separate INSEE statement said.
The increase points towards a possible pick up in consumption, though the December figure remained below the indicator's long-term average.