Iran's annual inflation rate fell more than two percentage points to 24 per cent in January, central bank governor said.
The year-on-year rate was 26.4 per cent in December, after falling from 28.3 per cent in November. Inflation had hit almost 30 per cent in October.
With the economy expected to be a key battleground in Iran's June presidential election, analysts say the new lower rates will come as good news for President Mahmoud Ahmadinejad who plans to run in this year's race.
Inflation had been climbing steadily from about 11 per cent since 2005 when Ahmadinejad took office pledging to share out Iran's oil wealth more fairly.
"Based on the latest report, the inflation rate went down to 24 per cent in [the Iranian month of] Day," Mahmoud Bahmani was quoted as saying by Donya-ye Eqtesad business daily. The month of Day ended on January 19.
Reformist critics have accused the conservative government of stoking price rises by heavy spending of petrodollars when crude prices were soaring, making it more difficult to cope when they started tumbling. Ahmadinejad has dismissed the criticism, saying high prices were a global problem, and officials say the government has inflation under control. Ordinary Iranians often complain about high living costs and fast-rising prices.
Bahmani previously said he expected the downward trend of inflation to continue to around 22-23 per cent by the end of the Iranian year in March. Iran is under international pressure over its disputed nuclear programme. Analysts say US and UN sanctions are pushing up the cost of doing business and deterring investors. Some economists have said the inflation rate was coming down because of a global economic downturn as well as monetary tightening.