New figures from the Central Statistics Office show that consumer prices fell last month on an annual basis - the first such fall since July 2010.
The CSO said prices fell by 0.1% in February 2014 compared to February 2013 on the back of cheaper petrol, diesel and cars, while the cost of clothing & footwear and furniture decreased due to sales in the shops.
The costs of education and miscellaneous goods and services rose last month due to higher private health insurance premiums and the increased costs associated with the local property tax.
Prices in restaurants and hotels also rose due to higher prices for alcohol consumed on licensed premises.
On a monthly basis, today's figures show that consumer prices rose by 0.5% in February from January due to more expensive clothing and footwear, furnishings and household maintenance as the sales came to an end.
This was partly offset by falls in the prices of alcohol and food and non-alcoholic drinks last month.
Commenting on today's figures, Merrion economist Alan McQuaid said that domestic inflationary pressures in Ireland are likely to remain depressed for some time to come and sluggish consumer demand will in general continue to put downward pressure on prices in the months ahead.
"The residential property tax has hit disposable incomes hard, which in turn is weighing negatively on spending power. And it should be remembered that the full-year effect of the property tax will be felt in 2014," he added.