* Output stronger than in Germany in 1st month of Q3 (Updates with economist comment, recent bank of France report)

PARIS, Sept 10 (Reuters) - French industrial output rosemore than expected in July, driven by a surge in car productionthat helped make up ground lost in June and got the euro zone'ssecond-largest economy off to a sounder start in the thirdquarter.

While economists said the news was encouraging, some saidthe pace was set to moderate given that global economic growthwas losing steam and output would get less of a lift henceforthfrom rebuilding of previously depleted corporate inventories.

France's news follows a weaker than expected report fromGermany this week, while Italian production also came in belowforecasts. The three countries together account for more thanthree-quarters of the economy of the euro currency zone.

French statistics office INSEE said in a monthly report onFriday that overall industrial output rose 0.9 percent fromJune, when it had dropped 1.7 percent. Economists polled byReuters had on average expected a 0.7 percent increase.

Manufacturing output, often seen as a more precise gauge ofactivity, rose 1.4 percent after a June drop that INSEE said ithad revised to 1.2 from 1.3 percent.

Car production rebounded, rising 6.7 percent in July after a6.5 percent monthly decline in June.

"This masks that an underlying slowdown is under way, as amoderation in global growth and a less positive stimulus fromthe inventory cycle are likely to make their presence felt,"said ABN Amro economist Joost Beaumont.

"Nevertheless, growth in the sector is likely to remainsolid."

France's central bank said this week that industry outputheld steady in August according to a business survey it conductsevery month, and it said weakness in the auto industry was beingoffset by growth in other sectors.

The French report followed news on Wednesday that Germany'sindustrial output grew just 0.1 percent month-on-month in July,fuelling fears about growth there and across Europe after astrong second quarter.

Weak Italian industrial output data for July rounded out thepicture. Output there rose 0.1 percent after a 0.5 percent risein June month-on-month, well below a forecast for a 0.5 percentrise in July.

Euro zone gross domestic product growth rose a surprisinglystrong 1.0 percent quarter-on-quarter in the April-June period,largely due to a German surge, after 0.3 percent in the firstquarter.

But the OECD said on Thursday that growth in Europe andworldwide appeared to be slowing more sharply than it hadpreviously expected and that more monetary stimulus might beneeded to limit the extent of the deceleration. (Reporting by Brian Love; Editing by Hugh Lawson)