STOCKHOLM, Sweden — Sweden's annual inflation rate fell sharply in December, to 0.9 percent from 2.5 percent in November, mainly because of large interest rate cuts which caused borrowing costs to fall, the national statistics agency said Tuesday.

Statistics Sweden said consumer prices fell 1.3 percent from November to December.

In December, the Swedish central bank cut the repo rate by a record 1.75 percentage points to 2 percent in a move to ease the effects of the financial crisis.

Other triggers weighing on inflation included lower prices on fuel, clothing and electricity, while prices on package holidays, vegetables and transport services rose.