Consumer prices dropped 0.6pc lower last month compared to January of last year.
According to figures from the Central Statistics Office today, the fall in prices month-on-month was lower again at 0.8pc.
This is the second month in a row that the Consumer Price Index (CPI) has fallen, raising fresh fears that the economy may be entering a period of prolonged deflation.
This drop between last December and January was largely attributed to a sharp drop in fuel prices.
On an annual basis, areas that experienced a drop in prices included transport (down 6.6pc), clothing (down 3.1pc) and groceries (down 2.4pc).
However, from January 2014 to last month, education costs rose 4.9pc and alcohol and cigarettes were up 1.5pc.
On the short term basis, clothing (down 10.2pc) and transport (down 3.8pc) were again the areas that reported the biggest drop in prices.
Alcohol and cigarettes went up by 2.3pc on a monthly basis while fuel costs also rose 2.2pc.
The newly introduced water charges were taken into account when calculating the latest CSO figures "to ascertain their impact on the annual inflation rate".