New figures from the Central Statistics Office show that annual consumer prices fell by 0.4% in June on the back of cheaper clothes, food and furniture prices.
The 0.4% fall was the biggest in over two years and follows a 0.9% increase just two months ago in April.
The CSO said that clothing and footwear prices fell by 5.3% in June compared to the same time last year due to sales.
Prices of food and non-alcoholic drinks were down 2.7% as a result of lower prices across a range of foods such as meat, vegetables, honey, jam, chocolate and confectionary.
The cost of furniture and furnishings as well as non-durable household goods also fell by 3.7%.
Meanwhile, the cost of motor insurance fell by 10.2% in June compared to the same month last year.
The CSO said that June saw annual increases in the prices of eating out and accommodation in hotels, while education costs also rose by 1.8% and health costs were up 1.4%.
Consumer prices on a monthly basis in June rose by 0.1% due to increased prices in restaurants and hotels and utility bills.
This follows a decrease of 0.2% the previous month, the CSO said