The tumbling price of oil and a decline in food prices prompted by supermarket wars have pushed the economy into deflation.
The cost of living was 0.3pc cheaper in December compared with the same month a year earlier, and was down 0.4pc on the previous month as the sharp drop in global oil prices started to feed through to the petrol pumps and into home heating costs.
But when energy-related costs and mortgage interest costs were stripped out, prices actually rose.
Experts struck an upbeat tone, saying the drop in prices in some areas would make us feel richer.
They added that the negative inflation data reflected global factors rather than any slowdown in the recovery at home.
"As in the UK and US, Ireland's recovery is clearly gathering momentum despite weak price trends," said Conall Mac Coille, analyst with Dublin-based Davy Stockbrokers.
"GDP looks set to expand by 5pc in 2014, translating into a fresh low in the unemployment rate of 10.6pc in December and also buoyant tax revenues.
"It is therefore difficult to be too concerned by a negative CPI inflation number primarily driven by falling oil prices."
The Central Statistics Office also said prices rose by just 0.2pc last year on average, with one business lobby group declaring there was no justification for broad-sweeping pay increase claims.
Oil prices have plunged almost 60pc since June, partly because supply hasn't been cut and because of a boom in shale oil in the United States.
That slump in prices is finally translating into lower prices at the pumps, and that's had a knock-on effect on transport prices here, which fell 3.8pc in December compared with the same time last year. Petrol fell 7.5pc and diesel was down 9.6pc in December compared with the same period in 2014.
In the food category, where the supermarkets are battling it out for customers, the price of bread fell 4.1pc and pork was down 6.2pc. Breakfast cereals fell 1.1pc, but were up 3pc on the month. In other categories, the price of wine was up 2pc and clothing, on a monthly basis, was up 0.4pc, but down 2.7pc on the year.
Alan McQuaid of Merrion Stockbrokers said lower prices were likely to remain a feature for some time, thanks to the slump in oil prices.
"With prices falling into negative territory, the danger is that deflation becomes entrenched in the system," Mr McQuaid said.
"Ireland is not, in our view, on the brink of dangerous deflation. It's in a lot better shape than the eurozone as a whole.
"Deflation is less likely to take hold in a strong economy, and the Irish economy is far healthier at this juncture than the rest of euroland. All in all, we see lower oil prices as a boost to disposable income and positive for Irish consumers," he said.
Business chiefs said the negative inflation figure is masking rising business costs.
Mark Fielding of the Irish Small and Medium Enterprises Association said lower oil prices were still not translating into a drop in energy prices.
"The threat of deflation is understandably receiving widespread attention but the problem of rising business costs, concealed by the low overall figures, requires urgent attention from government. Business rents, insurance and bank charges are experiencing colossal increases," he said.