By Lisandra Paraguassu

BRASILIA Brazilian President Luiz Inacio Lula da Silva said on Friday that his government does not need to erase its fiscal deficit next year, given the importance of funding for priority projects and construction investments.

Speaking at a news conference, Lula said there is no need to eliminate the budget deficit immediately and chided investors for being "too greedy" in demanding targets that cannot be met.

"It would be tough to get to a (deficit) target of zero, especially because I don't want to make cuts in construction investments," he told reporters. "I'm not going to set a fiscal target that forces me to start the year by cutting billions in projects that are a priority for this country."

"If Brazil has a deficit of 0.5% or 0.25% ... That's practically nothing. So we will make the right decision and we will do what will be best for Brazil," he added in briefing with journalists at the presidential palace.

(Reporting by Lisandra Paraguassu; Writing by Anthony Boadle; Editing by Brad Haynes and Diane Craft)