The Islamic State group lost 12% of the territory it holds in Iraq and Syria in the first half of 2016, AFP reports citing an analysis by research group IHS.

The analysis published Sunday, July 10 says the jihadist group, which proclaimed its self-styled "caliphate" in the two countries in 2014, is continuing to lose ground after a string of setbacks last year.

"In 2015, the Islamic State's caliphate shrunk by 12,800 square kilometers to 78,000 square kilometres, a net loss of 14 percent," IHS said.

"In the first six months of 2016, that territory shrunk again by 12 percent. As of July 4, 2016, the Islamic State controls roughly 68,300 square kilometres in Iraq and Syria."

In Syria, IS is under pressure from regime troops backed by Russian forces, an Arab-Kurdish alliance backed by a U.S.-led coalition, and rebel forces, AFP says.

The IHS report did not include percentages by country.

IHS senior analyst Columb Strack said the losses were likely to mean IS would redouble its attempts at "mass casualty attacks."

"As the Islamic State's caliphate shrinks and it becomes increasingly clear that its governance project is failing, the group is reprioritizing insurgency," he said.

"We unfortunately expect an increase in mass casualty attacks and sabotage of economic infrastructure, across Iraq and Syria, and further afield, including Europe."

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