Consumer prices rose by just 0.1 per cent in the year to December, according to new figures published by the Central Statistics Office (CSO).
The latest data show prices were 0.1 per cent lower than in November.
Transport-related costs fell by 4.3 per cent over the year, largely due to a decline in petrol and diesel prices and a drop in air fares. Clothing and footwear costs were down 4.1 per cent due to heavy discounting by retailers, while household-related items such as furnishings, fell by 1.5 per cent.
The largest yearly price increases were in education, and miscellaneous goods and services, up 3.8 per cent and 2.6 per cent respectively. Fuel-related prices rose 2.1 per cent and communication costs by 1.7 per cent over the same period.
Motor insurance premiums were up 31 per cent in the year to December as insurers continued to push up prices, the figures show.
The main monthly changes affecting the Consumer Price Index in December were decreases in the cost of petrol, diesel and motor cars. The cost of alcoholic beverages sold in supermarkets and off-licences was also lower in the month.
Commenting on the latest figures, Merrion chief economist Alan McQuaid said despite the booming Irish economy, inflationary pressures are likely to remain fairly well contained in the immediate future, mainly because of lower oil prices. However, he said the cost of services like insurance and education look set to continue to rise.
Lobby group Isme warned that while inflation remains low, business costs are rising.
"Increasing costs are one of the most pressing issues facing SMEs at present. It is difficult for small businesses to grow and hire new staff when their cost base is continuously rising and their margins reduce," said Isme chief executive Mark Fielding.
