Washington, Feb 8 (PTI): The ISIS' recent defeats signify its worsening money problems, desertions and a dwindling pool of fighters with many of them joining rival militant groups after facing pay cuts, according to a media report.

Citing top analysts and monitoring groups, the Washington Post reported that the recent losses of the terror group are linked to its struggles to pay fighters and recruit new ones to replace those who have deserted, defected to other militant groups or died on the battlefield.

Only a year ago, the Islamic State was seen as a juggernaut -- rich, organised and fielding thousands of motivated fighters -- but in recent months, its momentum has been reversed, the report said.

US military officials estimate that the group has lost as much as 40 per cent of the territory it held in Iraq and as much as 20 per cent in Syria, it said.

Kurdish and Arab forces, including Iraq's increasingly competent military, have advanced against the group with the help of airstrikes from a US-led coalition.

The air raids have damaged the Islamic State's oil infrastructure, a key revenue source, and the territorial setbacks have stripped the group of populations to tax and assets to seize, analysts say.

All of this, they say, appears to have forced the group to reduce salaries and benefits for fighters.

Last month media reports had said the terror group's Bayt al-Mal, the Treasury Ministry, has decided to cut the salaries of its fighters in half due to the "exceptional circumstances" ISIS has been witnessing.