Once seen as an economy buoyed by natural gas resources, the Asian Development Bank said Papua New Guinea is on pace for a severe contraction.

The ADB said the country's economy should grow by about 4.6 percent this year, but shrink to 2.4 percent growth in 2017. An inflation rate of 6.5 percent remains steady through next year because of higher food and healthcare costs.

A liquefied natural gas project in Papua New Guinea, led by Exxon Mobil, marked a milestone with its 100th delivery last year. More than 7 million tons of LNG have been shipped from the facility since it opened two years ago.

Construction at the LNG facility in Papua New Guinea began in 2010. The facility is expected to produce more than 9 trillion cubic feet of natural gas over its 30-year lifespan. The country, meanwhile, is positioned well to take advantage of the growing energy demands from economies in the Asia-Pacific region.

The ADB last year cautioned that Papua New Guinea's growth prospects dwindle, however, as the "one-off boost" for LNG exports fades from the country's economy. With energy prices collapsing, the International Energy Agency has warned a "temporary window of opportunity" may be closing on economies looking to capitalize on natural reserves.

For the region as a whole, ADB said most other economies are expected to remain healthy despite uncertainty elsewhere in the global economy.

"This positive news is balanced against continued challenges in some of the region's larger resource-export dependent economies due to low commodity prices prevailing internationally," Xianbin Yao, director general of ADB's Pacific department, said in a statement.