Global economic losses exceed $1 trillion a year, it said, referring to lost productivity due to apathy or lack of energy that lead to an inability to function at work or cope with daily life.
"Depression is the single largest contributor to years lived with disability. So it's the top cause of disability in the world today," Dr Dan Chisholm of WHO's Department of Mental Health and Substance Abuse told a news briefing.
Depression is 1.5 times more common among women than men, he said. A further 250 million people suffer anxiety disorders, including phobias, panic attacks, obsessive-compulsive behaviour and post-traumatic stress disorder, the report said.
Some 80 percent of those stricken with mental illness live in low- and middle-income countries.
"That puts paid to the notion of these disorders being diseases of the rich or the affluent, that is not the case. In fact in many countries people who are affected by poverty, unemployment, civil strife and conflict are actually at higher risk of certainly anxiety disorders and also depression," Chisholm said.
Three age groups are particularly vulnerable to depression - youth, pregnant or post-partum women, and the elderly.
"The pressures on today's youth are like no other generation perhaps," Chisholm said.