The "Islamic State of Iraq and the Levant" (ISIL) lost 12% of its territory in Iraq and Syria in the first half of 2016, according to an analysis published Sunday (July 10th) by research group IHS.

The analysis says ISIL is continuing to lose ground after a string of setbacks last year, AFP reported.

In 2015, the report said ISIL territory shrank by 12,800 square kilometres to 78,000 square kilometres, a net loss of 14%.

"In the first six months of 2016, that territory shrunk again by 12%," the report added, noting that as of early July, ISIL controls "roughly 68,300 square kilometres in Iraq and Syria".

IHS senior analyst Columb Strack said the losses could mean ISIL would redouble its attempts at "mass casualty attacks" as it "becomes increasingly clear that its governance project is failing".

ISIL also has seen its revenues drop, from around $80 million a month in mid-2015 to $56 million a month by March 2016, according to IHS.

"This figure has probably continued to decrease since March by at least another 35%," said Ludovico Carlino, another senior analyst at IHS.

"Combined with the military setbacks on the ground, this is having an impact on the internal cohesion of the group as indicated by a marked increase in defections and desertions since January," he added.