Latest figures from the Central Statistics Office show that consumer prices rose by 0.5% in April of this year compared to the same time last year.
Prices last month were unchanged from March, the CSO said, as increases in the price of health insurance premiums and certain foods were offset by a fall in airfares.
On an annual basis, the CSO said that prices for alcohol and tobacco rose by 5.3%, while education costs rose by 4.8% and miscellaneous goods and services - which includes health insurance - increased by 2.5%.
Communication costs fell by 4.6% in April compared to the same month last year, while furnishings and household equipment prices fell by 3.4% and clothing and footwear costs were down 1.8%.
"Domestic inflationary pressures in Ireland are likely to remain depressed for some time to come," Alan McQuaid said on the publication of this morning's figures.
"Continued weak consumer demand will put downward pressure on prices in the months ahead. The austerity measures announced in Budget 2013, in particular the residential property tax, will again hit disposable incomes, which in turn will weigh negatively on spending power," he concluded.
Alan McQuaid says it is difficult to see the average inflation rate for the year coming in much higher than 1%.
That compares to a rate of 1.7% in 2012 and 2.6% in 2011.
Davy's chief economist Conall MacCoille said one of the reasons for the drop in the inflation rate was the fact that the increase in the top rate of VAT to 23% last year had not been repeated in 2013.
Falling mortgage interest costs have also contributed to the decline, he points out.
However, the ECB decision to cut interest rates to 0.5% will not yet have fed into the Irish inflation rate yet.
"Overall inflation has been weaker than we expected. This is good news for the Irish consumer, indicating that price pressures will put less pressure on real spending power. In time, the sharp decline in Irish CPI inflation could lead us to revise up our forecast for consumer spending in 2013," he concludes.
