The champions would have gone top of the Ligue 1 table with a win at Parc des Princes, but they were unable to see off a well-drilled Montpellier side.
PSG lacked a cutting edge and Edinson Cavani in particular looked out of sorts as the Parisian giants' run of six consecutive home wins came to an end.
Blanc's side suffered their first Ligue 1 defeat of the season at Guingamp last weekend and they will be three points behind Marseille if the leaders beat Lille on Sunday, while Lyon will go above them if they win at Bordeaux.
It was disappointing end to the year for PSG and former France coach Blanc believes the winter break has come at a good time for his side.
He said: "There were positives in our play, even if our transition was too slow and we lacked a little determination in front of goal.
"It wasn't enough to beat Montpellier. The match was not complete, much like our first half of the campaign. Offensively, we didn't do enough to win this match.
"We needed to make it happen, and we didn't do it. Now we need to recharge the batteries. The winter break will be good for us, both mentally and physically."
PSG travel to Bastia for their first Ligue 1 game of the new year on January 10.
