The German business climate worsened in June, a key survey published on Friday showed, as Europe's largest economy faced up to a possible stoppage of Russian gas.

The closely watched Ifo business climate index fell to 92.3 from 93 in May, after rising for the last two months, according to the Ifo Institute for Economic Research, a Munich-based think tank.

Managers were "markedly more pessimistic" about the outlook for Germany, said Ifo president, Clemens Fuest.

"Rising energy prices and the threat of gas shortages are of great concern to German business," Fuest said.

Germany is highly reliant on Russian energy imports to meet its needs, especially for gas. The fuel is used for electricity generation, heating homes and powering industrial production.

Germany is heading for a gas shortage if Russian gas supplies remain as low as they are now, and certain industries would have to be shut down if there is not enough come winter, Economy Minister Robert Habeck told Der Spiegel magazine on Friday.

"Companies would have to stop production, lay off their workers, supply chains would collapse, people would go into debt to pay their heating bills, that people would become poorer," Habeck

On Thursday, Germany raised the alert level under its emergency gas plan after Russian energy giant Gazprom slowed deliveries.

Flows of gas via the Nord Stream pipeline, which runs from Russia to Germany under the Baltic Sea, were cut by 60 percent last week.

(With input from agencies)