Readability is a critical factor in any BI report or dashboard. Fonts do play a major role in perception of content. Crisp and good font aids in reading and faster information consumption by the user. Typography is an art and science bundled together, but there are some golden rules that everyone can follow in order to maintain good readability of the end product.
As a developer, one is entrusted to design with many constraints to real-estate. The problem is compounded when the report is either printed or viewed in mobile devices. Narrow fonts can be used in places where real-estate for displaying data is a constraint.
The image above shows a single font (Arial) of same size except that one is Normal and another is Narrow. Narrow font does not hinder readability unless the size is shrunk in to single digits. Output fidelity of the content is not lost by shrinkage or squeeze by adopting narrow fonts.
Both charts have been plotted within same dimensions. Look closely at the starting point of axes and data labels and it becomes evident that overall readability is better.
Narrow fonts are not the answer to all design constraints. If narrow fonts are used heavily in a report with several data points, the overall report will look congested. Choosing narrow font over regular one is a decision to be taken judiciously.