The Islamic State has often been described as the richest terrorist organization in the world, but a new report issued on Saturday by the International Center for the Study of Radicalization and Political Violence (ICSR) suggests that, since 2014, ISIS’ annual revenue has been cut by more than half, from up to $1.9 billion in 2014 to a maximum of $870 million in 2016.

“Unlike most terrorist groups, Islamic State has a population from which it can collect taxes, and a territory it can exploit – be it by extracting natural resources, seizing property, or looting banks and shops,” the report states. “This means that the group is less reliant than most terrorist groups on foreign donors, charities, or conducting its ‘business’ through the international banking system – the various choke points against which efforts at “countering terrorist finance” have traditionally been directed.

“Conversely, though, its reliance on population and territory helps explain the group’s current financial troubles. According to figures provided by the Global Coalition, by November 2016 Islamic State had lost 62 per cent of its mid-2014 ‘peak’ territory in Iraq, and 30 per cent in Syria. From a revenue perspective, this means fewer people and businesses to tax, and less control over natural resources, especially oil fields.

“Another consequence is the group’s diminished ability to generate income from looting and confiscation. The group’s “economic model” relies on relentless expansion, providing it with new resources to seize and exploit. Leaked budget statements demonstrate how significant this source of revenue was at the height of the group’s success. Now that the expansion has been stopped and reversed, this source of revenue has largely dried up.”

“There are good reasons to believe that Islamic State revenues will further decline,” says the new report. “In particular, capturing Mosul, the Caliphate’s ‘commercial capital,’ will have a significant detrimental effect on Islamic State finances.”

However, the decline in revenues may not have an immediate effect on the group’s ability to carry out terrorist attacks outside its territory, according to the report, which states that “while hurting Islamic State finances put pressure on the organization and its state-building project, wider efforts will continue to be necessary to ultimately defeat it.”