* Q1 GDP revised to 3.14 pct y/y vs preliminary 3.04 pct
* 2014 GDP outlook raised to 2.98 pct from 2.82 pct previously (Adds details, comments)
By Jeanny Kao and Michael Gold
TAIPEI, May 23 (Reuters) - Taiwan predicts its economy will grow at the fastest rate since 2011 this year on improving prospects for global growth and the island's advantageous position in the global tech supply chain.
The island's statistics agency said on Friday it expects GDP growth of 2.98 percent in 2014 - an upgrade from its previous estimate of 2.82 percent, which itself was an upgrade from a previous forecast of 2.59 percent.
First-quarter GDP growth was revised to 3.14 percent, better than its earlier estimate of 3.04 percent released in April.
The government cited investment and private consumption as main drivers of growth, even as Taiwan's heavily trade-dependent economy has gained from improving U.S. demand. Growth in the world's largest economy is widely expected to bounce back from the effects of severe weather that led to a sharp slowdown in the first quarter.
China's rebalancing efforts have had an uncertain effect, potentially boosting imports to the world's second-largest economy while slowing growth overall.
China's factory sector showed signs of stabilisation in May, according to a purchasing managers' index (PMI) survey released on Thursday, suggesting that the government is managing its mandate of slower but steady growth.
But Taiwan's exports to the mainland - its largest trading partner - have been erratic in recent months, swinging from growth to contraction as seasonal effects amplify China's wobbly domestic growth prospects.
The tech sector remains a bright spot for Taiwan and routinely gives a major boost to growth. The island's Ministry of Finance said that the overall value of electronic exports reached a new single-month record in April, as Taiwan continues to occupy the highest rung of the supply chain for products such as chips and smartphone components.
"Chip vendors should continue upping their expenditures and investments heading into the second half of the year, which will provide a further boost to overall economic growth," said Michelle Tsai, a Taipei-based economist at Jih Sun Securities Corp. (Reporting by Jeanny Kao; Editing by Jacqueline Wong)