South Korea's prime minister on Wednesday raised the urgent need to actively deal with economic shocks from the new coronavirus as parliament has begun to review an extra budget bill.

Prime Minister Chung Sye-kyun made an appeal at the National Assembly amid concerns that the COVID-19 outbreak is expected to deal a serious blow to the economy.

"It is more urgent than ever to reduce shocks (from the new coronavirus) on people's livelihoods and the economy and actively deal with economic downside risks," Chung said at a meeting of the parliamentary special committee on budget review.

The government submitted an 11.7 trillion-won (US$9.81 billion) supplementary budget bill last week to parliament in an effort to step up its battle against the virus and prop up the slowing economy.

Chung said the government's financial health remains good, stressing that it is time to take bold actions against the virus.

"If we do not respond (to the situation with the extra budget) now, the economic recovery would be delayed, possibly causing higher costs later," Chung noted.

Smaller merchants and businesses were hardest-hit by the outbreak amid sluggish domestic demand. The Bank of Korea recently cut its 2020 growth outlook to 2.1 percent from 2.3 percent, citing the impact of the coronavirus.

Rival political parties earlier agreed to pass the extra budget bill during the current extraordinary parliamentary session that will end on Tuesday.

"Timing is very important in (implementing) the extra budget," Chung said, calling for bipartisan cooperation in swiftly reviewing the proposal.

South Korea has reported 7,755 cases of the new coronavirus since the outbreak began on Jan. 20.

At the parliamentary session, Finance Minister Hong Nam-ki described the idea of providing basic income to citizens to support their livelihoods as a "difficult" option to take.

Several chiefs of local governments called on the government and the National Assembly to consider offering basic income evenly to people to help them cope with the economic fallout from the outbreak.

"(The provision of basic income) may be effective, but there would be problems about the government's financial health and funding," Hong said.

Hong also dismissed the possibility that South Korea may fall into deflation due to the virus outbreak. (Yonhap)