New Central Statistics Office figures show that consumer prices fell by 0.3% in May compared to the same time last year due to cheaper clothing and footwear, transport and food prices.
On a monthly basis, however, prices rose by 0.4% in May compared to April, the CSO said.
The CSO said on a yearly basis, the prices of clothing and footwear fell by 4.2% due to sales, while transport costs were down 2.9% on the back of lower petrol and diesel prices as well as a fall in the price of cars.
There were also decreases in the prices of some food products, such as bread, vegetables and meat, while furnishings and household equipment prices eased by 2.3% last month.
These decreases were offset by a rise in the cost of education, which climbed by 5% due to the extra costs associated with third level education.
May also saw increases in the cost of rents and the introduction of water charges, while prices in restaurants and hotels increased by 1.7% due to rises in the cost of accommodation and eating out.
Consumer prices fell on an annual basis for the first time in more than four years in December in line with many other euro zone countries, a trend the European Central Bank is currently trying to reverse.
Commenting on today's figures, Merrion economist Alan McQuaid said that despite the strong recovering economy, domestic inflationary pressures in Ireland are likely to remain fairly well contained in the immediate future.
"That said, we do expect some pick-up as the year goes on due to higher oil prices, a gradual rise in wages, and the lower euro pushing up import costs," he added.
He said that the country's average inflation rate was 0.2% in 2014, down from 0.5% in 2013. He expects it will now average just 0.1% this year, with inflationary pressures stronger in the second half of 2015 than in the first half.
Meanwhile, the Irish Small and Medium Enterprises Association called on SME employers to resist unsustainable pay demands, particularly as there is no inflationary justification for increases.
"The lessons that should have learned from the recession have been ignored by the Government in the selfish desire to be re-elected, through buying off the public sector. There is no quicker way to undo the fragile growth in the SME sector than to force them to pay wages above the competitive market rate," ISME's chief executive Mark Fielding said.
