Between early January 2016 and the end of the year Daesh's self-declared "caliphate" fell from 78,000 to 60,400 square kilometers (47,500 to 38,500 square miles ), IHS Markit said.
"Daesh 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 Daesh-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 the terrorist group, which overran the country's second city in early June 2014.
Daesh 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 Daesh terrorists 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, AFP reported.