The annual rate of inflation fell to 2.9 per cent in September, its lowest level since November 1999, as the traditional bounce in prices following the end of the summer sales failed to materialise.
The consumer prices index rose 0.2 per cent in September to stand 2.9 per cent higher on the year, the Central Statistics Office said.
Economists welcomed the fall in inflation which has been running at almost twice the European average over the past few years.
"This clearly signals that the ongoing deceleration in inflationary pressures in the economy continues," said Mr Jim Power, chief economist at Friends First.
"In a sense inflation has become yesterday's story, even though there are sectors of the economy where prices are increasing at an unacceptable pace such as the services sector."
Figures from the Central Statistics Office showed the annual rate of goods inflation running at 1.7 per cent compared to services inflation which came in at 4 per cent.
The European Union harmonised index of consumer prices, which is used for intra-EU comparison, rose by 0.2 per cent in September to leave the annual rate at 3.8 per cent, down from 3.9 per cent in August.