Why the world suffer from economic depression after World War 1?

At first, the war itself caused so much destruction that it took time for the countries involved to recover. Additionally, most of the major combatants had run up massive debts to fight the war, and struggled to pay them off. Germany had the added effects of the reparations and Ruhr occupation, which hurt their economy as well. But by the mid-1920s, most countries had largely recovered and some were actually doing better than before the war- even Germany, thanks to help from the US.

However, this all came to an abrupt end in 1929. It's complicated, and the exact reasons differ based on which economist you ask, but the US suffered an economic crisis punctuated by the Stock Market crash of Black Tuesday in October 1929. Subsequently, the London stock market also crashed, and some major banks failed. This caused a domino effect, where other countries' economies also collapsed.