Lower petrol, clothes and food prices have helped push the cost of living down 0.5pc in the last year.
Prices rose by 0.6pc last month but are still lower than they were in February 2014, new Central Statistics Office figures show.
Petrol prices have plummeted by 15pc and diesel is down 16.3pc in the last year, while clothing and footwear prices are down 3pc.
Consumers have also seen a welcome drop of 2.8pc in the cost of food, with lower prices for many products including meat, dairy, vegetables, fruit and bread.
However, the cost of eating out rose by 1pc, while hotel prices rose by a hefty 7.8pc, and health and car insurance premiums both rose by over 15pc.
The Irish Small and Medium Enterprises Association warned that deflation could threaten economic recovery if consumers were put off spending as they waited for prices to fall further.
It warned against wage increases as lower mortgage interest and energy costs meant consumers already had more money to spend.
With deflation, trade unions' "spurious argument on cost of living increases is dismantled", said ISME chief executive Mark Fielding.
Alan McQuaid of Merrion Stockbrokers said he did not believe Ireland was on the brink of dangerous deflation.
"Deflation is less likely to take hold in a strong economy and the Irish economy is 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.
The average inflation rate in 2014 was just 0.2pc and it was likely to be the same again in 2015 as inflationary pressures would be stronger in the second half of the year.
This was because the strengthening labour market was likely to prompt a gradual rise in wages, while the weakening euro would also push up import costs.
Homeowners are continuing to benefit from lower mortgage interest repayments, which fell by 8.3pc in the last 12 months, though those renting saw increases of 8.5pc.
But lower world energy prices have still not filtered through to utility bills as electricity prices are up 1.5pc and gas bills were up 1.1pc.
However, the cost of home heating oil was down 21.7pc in the year, despite rising 6.7pc in February.
On a monthly basis, clothes and footwear prices rose by 6pc after the end of the winter sales, while beer prices fell by 2.8pc.
Childcare costs have risen by 2.4pc in the last year.