The 12-month rate of inflation in Iceland now measures 1.9 percent, according to Statistics Iceland.
The figure has dropped since last month, when it measured 2.2 percent.
The Consumer Price Index has actually decreased by 0.39 percent since August, which means that prices are, on average, cheaper now than they were a month ago.
The main explanation for the overall drop is attributed to the fact that the cost of flights to international destinations has been slashed by around a quarter between months—most likely due to a drop in demand at the end of the summer vacation.
The cost of petrol and diesel has also dropped by around five percent, RÚV reports.
The cost of clothes and shoes has, on the other hand, increased by an average of 4.4 percent in one month.
If increases in housing prices are not taken into account then the 12-month inflation figure in Iceland is closer to 0.5 percent.
The Central Bank of Iceland target rate of inflation (including housing) is 2.5 percent, and has been for many years. Inflation briefly dipped below that level in 2011 and is again now, but has traditionally been higher than 2.5 percent.