LONDON: ISIS lost nearly a quarter of its territory in Iraq and Syria last year, according to a report released Thursday by research firm IHS Markit.

Between early January 2016 and the end of the year ISIS' self-declared "caliphate" fell from 78,000 to 60,400 square kilometers (47,500 to 38,500 square miles ), IHS Markit said.

"ISIS suffered unprecedented territorial losses in 2016, including key areas vital for the group's governance project," said Columb Strack, head of IHS's Conflict Monitor.

The figures for last year demonstrate further decline of ISIS-controlled land, which the research group said dropped from 90,800 to 78,000 square kilometers in 2015.

Iraqi forces are currently fighting to recapture Mosul from ISIS which overran the country's second city in early June 2014.

ISIS leader Abu Bakr al-Baghdadi declared the so-called "caliphate" from Mosul and if government troops retake the city it would effectively end the group's claim of running a state.

The IHS Markit analysts estimate that ISIS fighters could be driven out of Mosul within months, ending the military operation launched on Oct. 17.

"We expect Iraqi government forces to recapture Mosul before the second half of the year," Strack said.

The battle to regain ISIS' self-proclaimed capital of Raqqa, in northern Syria, will however prove more difficult, according to IHS Markit.

"Raqqa represents the core of ISIS and they are unlikely to leave without a fight.

"It would probably take a major ground intervention by one of the main external players, the U.S., Turkey, or Russian and Iranian-backed Syrian government forces, to expel ISIS from Raqqa in 2017," said Strack.

A U.S.-backed Kurdish-Arab alliance has been battling since November 5 to drive ISIS from Raqqa, taking large areas of northern Raqqa province.

On Dec. 10 the Syrian Democratic Forces announced the second phase of its Raqqa operation, aiming to liberate more territory and isolate the city.