The latest figures from the Central Statistics Office show that consumer prices fell again last month, but the annual fall was the smallest since May.
Consumer prices fell at an annual rate of 5% last month, compared with an annual fall of 5.7% in November.
The CSO also said that the average rate of price falls last year was 4.5%, with a dramatic fall in mortgage interest repayments the main factor.
Mortgage repayments dropped by 40% last year as the European Central Bank cut interest rates. Energy prices were also down 7.9% last year. Rents fell by 14%, but education prices rose 6.4% in the year and prices in the alcohol and tobacco category increased by 6.3%.
Prices in December fell by 0.5% from November with decreases in clothing and footwear, alcohol and transport. Clothing and footwear prices dropped 3.6% in the month as sales continued, while prices in the alcohol and tobacco category fell 1.5% as a result of decreases in the price of spirits and wine sold in supermarkets and off-licences.
The figure were compiled before the Budget, so it will be next month before changes in excise duty on alcohol feed through.
Read more details of price changes from the CSO here
Lower car prices led to a 0.8% fall in transport prices, though air fares rose by 8.3% in the month. Car prices have fallen by 7% over 12 months.
Meanwhile, the CSO says the harmonised EU measure of prices - which excludes mortgage repayments - fell by 0.5% in the month, giving an annual drop of 2.6%.
